Payments technology provider Global Payments has reached a definitive agreement to purchase smaller rival EVO Payments, at an enterprise value of $4bn for the latter.

The all-cash deal will see Global Payments paying $34 for an EVO share, marking a premium of around 24% to EVO stock’s last close on 29 July 2022.

Global Payments will use cash reserves along with a committed bank facility to fund the transaction.

It would secure $1.5bn through convertible notes from private equity company Silver Lake.  

The deal, which awaits EVO stockholder regulatory approvals, is anticipated to be completed by the first quarter of next year.

It is projected to be accretive in the first year after completion and generate $125m of run-rate synergies.

Some investment funds related to Madison Dearborn Partners and other EVO stockholders, who own nearly 22% of voting rights in EVO, have agreed to vote in support of the deal. However, their approval is subject to certain conditions, said the company.

Global Payments president and COO Cameron Bready said: “The acquisition of EVO is highly complementary to our technology-enabled strategy and provides meaningful opportunities to increase scale in our business globally.

“Together with EVO, we are positioned to deliver an unparalleled suite of distinctive software and payment solutions to our combined 4.5 million merchant locations and more than 1,500 financial institutions worldwide.”

With the new deal, Global Payments intends to enhance its presence in new regions including Poland, Germany, Chile and Greece.

The deal is also expected to bolster the company’s profile in current markets such as the US, Canada, Mexico, Spain, Ireland and the UK.

It will enable Global Payments to include accounts receivable automation software solutions to support its current B2B and accounts payable platform.

The latest deal continues Global Payments’ buying spree, which includes the takeover of TSYS for $21.5bn in September 2019.

Last year in September, the firm announced the purchase of MineralTree for $500m in cash.

It also chalked $70bn merger plans with payment giant FIS, which were later called off.