Vantiv, a US-based payments processing company, has signed an agreement to takeover Mercury Payment Systems from technology investment firm Silver Lake for a total value of $1.65bn.

The acquisition is said to be a part of the company’s strategy of expanding its payments business to leverage the potential growth expected for the industry. The integrated payments market is estimated to grow by about 30% by 2017.

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The acquisition is expected to further expand company’s payments solutions built upon the previous purchase of Element Payment Services.

Vantiv president and CEO Charles Drucker said that by collaborating Mercury’s distribution network and innovative solutions with Vantiv’s technology platform and products, the company is keen to develop a payments eco-system that allows it to serve these clients.

"Bringing the companies together will dramatically enhance our distribution and technology capabilities to serve a number of large and growing industry verticals," added Drucker.

Mercury’s distribution network comprises of over 3,000 point-of-sale software developers and dealers facilitating small and medium-sized businesses across the US and Canada. The business generated net revenues of $237m, a growth of 17% year-over-year in 2013.

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Mercury CEO Matt Taylor said: "Vantiv and Mercury are aligned in our desire to create integrated software solutions that fulfill the specialized needs of merchants. Software developers and dealers are helping to lead the way for the future of payments, and combining with Vantiv puts us in a strong competitive position to jointly offer a broader set of value-added products and services to our partners and merchants."

Currently subject to the US antitrust clearance along with other regulatory approvals, the closure of the agreement is expected during the second quarter of 2014.