The payment processing company Shift4 announced on Tuesday that it will buy the Swiss payments technology business Global Blue.
Shift4 will pay cash for the Swiss company, according to a press release on Tuesday, with the equity value of the acquisition pegged at $1.5 billion, according to a report from the Wall Street Journal. The enterprise value, including debt, is about $2.5 billion, the release said.
Allentown, Pennsylvania-based Shift4 will add Global Blue's merchant solutions to its own payment platform, the Shift4 release said.
The board of directors for both companies unanimously approved the merger, which is expected to be completed by the third quarter of this year, according to the release.
The purchase will be the largest in the firm’s history, Benchmark equity research analyst Mark Palmer said in a note to investors Wednesday. A Shift4 spokesperson did not immediately respond to a message seeking comment.
The company has a presence in Europe, Asia, and South America and works with more than 400,000 retail and hospitality locations, the release said.
Global Blue offers tax-free shopping, currency conversion and payment solutions and is linked to luxury brands such as Louis Vuitton, Hermes, Valentino, and Prada, President Taylor Lauber said during prepared remarks in an earnings call Tuesday.
"The combination of their latest capabilities, our growing geographic coverage, Global Blue's, existing scale and two-sided network were all factors in helping us underwrite this transaction with a high level of confidence," he said.
The purchase fits into Shift4's strategy of building an integrated platform to power payments across the globe, Lauber said.
The acquisition of Global Blue "further builds upon our capabilities in this area," he added.
Analysts were generally upbeat about the merger.
The deal "likely accelerates significant international market expansion, particularly in retail," RBC Capital Markets analyst Daniel Perlin wrote in a note to investors Wednesday.
The deal is “a little bit different for (Shift4), but makes sense as they continue to push into international markets,” Gimme Credit Senior Bond Analyst Stu Novick said in an email.
Shift4 also reported fourth-quarter results on Tuesday. The company said gross revenue rose 26% to $887 million for the fourth quarter for the period,from $705.4 million the year-ago quarter in 2023. The company also reported net income of $139.3 million for the quarter, an increase of 86% from $19.2 million in net revenue reported in the fourth quarter of 2023.
The company's revenue came in below expectations, Palmer wrote in his Wednesday note to investors. The consensus estimate for Shift4's revenue for the quarter was $1.01 billion, he said.
Palmer downgraded the research firm's recommendation on Shift4 to "hold" because Shift4's "sizeable 4Q24 revenue miss, combined with its soft FY25 guidance, coming at a time when its founder and longtime CEO is in the process of departing, gives us pause."
Shift4 CEO Jared Isaacman is President Trump’s pick to lead NASA. He was nominated in December and awaits Senate confirmation. In the meantime, Lauber is expected to follow in his footsteps and take over leadership of the company.
