Deluxe has signed a deal to acquire First American Payment Systems, a privately owned payment processor, for $960m in cash.

Through the deal, Deluxe expects to expedite its transformation into a payments technology firm in line with its One Deluxe strategy.

First American offers in-store, online, and mobile payment solutions to partners and merchants. These include digital payment processing services that help customers navigate through traditional, mobile, and virtual point-of-sale channels.

Furthermore, the company anticipates that the deal will help double the annual revenue of its payments segment.

Delux president and CEO Barry McCarthy called the deal ‘a major, logical and responsible next step’ in the company’s transformation.

McCarthy noted: “With electronic payments playing an increasingly important role across the economy, the addition of First American’s independent, leading payments platform will advance our One Deluxe strategy and our overall growth trajectory.”

Further deal rationale

First American’s omni-channel payment technology and proprietary back-end processing and settlement platform is said to assist Deluxe’s transformation into a payment major.

Additionally, the deal will combine First American’s distribution channels of independent software vendors, financial institutions (FIs), and independent sales organisations and Deluxe’s FI and small business customer base.

The combination is said to generate cross-sell opportunities in new verticals. This includes government, not-for-profit and retail.

Deluxe further noted that First American’s technology platform will help it innovate across its Cloud Solutions, Promotional Solutions and Checks business segments.

It is also said to open up a wider range of future M&A opportunities for the company.

Commenting on the deal, First American CEO Neil Randel said: “In joining forces with a Fortune 1000 publicly traded company, we are advancing our mission to create innovative solutions as we continue to help our customers succeed and prosper.”