Fidelity National Information Services bought Canadian company Everlink Payment Services recently to fuel its international expansion, and it has more acquisitions in the works.
Executives at the Jacksonville, Florida-based company, also known as FIS, told analysts about the Everlink purchase on a second-quarter earnings call Tuesday. They offered few additional details and didn’t say when it was purchased, but presumably in the past three months.
“We recently acquired Everlink, a leading provider of integrated payment solutions to Canadian financial institutions, further executing on our international expansion strategy,” FIS CEO and President Stephanie Ferris said during the call.
A spokesperson for the company didn’t immediately have a comment regarding how much was paid for the business, and how many employees may be absorbed in the merger.
Everlink, based in Ontario near Toronto, provides its integrated payments services to financial institutions and reaches about 90,000 Canadian merchants, handling about 2.62 billion transactions annually, according to the company’s website. It also has about 2,300 ATMs under its management and has issued about 5.5 million debit cards.
The acquisition will add about $20 million in annual revenue, FIS Chief Financial Officer James Kehoe told analysts on the earnings call. While it’s not clear how much was paid, the company made no disclosures about the acquisition in its quarterly report to the Securities and Exchange Commission so presumably it was immaterial.
During the call, Ferris pointed to the Everlink acquisition, as well as the April agreement to purchase an issuer business from Global Payments, as key merger-and-acquisition components driving international expansion. Also in April, FIS said it would sell its minority stake in its merchant business Worldpay to Global Payments.
Ferris also suggested there are more acquisitions coming soon. “We have a robust pipeline of M&A opportunities across our key growth sectors, with additional acquisitions expected shortly,” Ferris said on the earnings call Tuesday.
FIS is very familiar with Everlink because it bought out the company’s former majority owner, Metavante Technologies, back in 2009. Then, FIS sold a majority interest in Everlink to CO-OP Financial Services in 2015.
Mark Ripplinger, who was Everlink’s president at the time of the 2009 transaction, still holds that role today and has added the CEO post, according to the company’s website.
Everlink was founded in 2004 by a group of payments executives behind New York Cash Exchange, or NYCE, and a Calgary credit union-owned entity called Celero Solutions, according to its website. The company was created to provide “growing demand in the Canadian credit union marketplace for a new debit switching alternative,” according to its website.
During the earnings call, Ferris explained why FIS purchased Everlink. “We think it fits very nicely into our payments portfolio, and they're also very excited to be part of the FIS umbrella,” Ferris said during the call to discuss the second-quarter earnings report. “We think we can really add distribution and scale for them.”
Aside from the acquisition, FIS executives discussed a second-quarter downturn for the company’s capital markets solutions business segment, which provides its technology and software services to trading firms, brokers and investment. It’s the smaller of two key FIS business segments, with the other larger banking solutions segment focused on providing technology and software to banks and credit unions.
“We did see some softness, temporary softness, in our lending business, largely tied to the slowdown in large financial institutions’ loan syndication activity in the second quarter, specifically related to some macroeconomic uncertainty,” Ferris said. “The good news is, in July and into August, we've been seeing a very nice rebound in that syndication activity.”
Second-quarter revenue for the capital markets segment still increased 6% to $765 million while revenue for the company’s banking segment also rose 6% to $1.8 billion, according to the quarterly report.
FIS’s second-quarter gross profit inched up less than 1% to $952 million, according to the quarterly filing. Meanwhile, accounting related to the transactions with Global Payments resulted in a net loss of $469 million, compared to net income of $238 million in the year-ago quarter. Overall, second-quarter revenue climbed 5% to $2.62 billion.
