Credit-card processor TSYS said today it has purchased 60 percent of a California company that specializes in setting up and processing transactions for restaurants, retailers and personal services businesses.
TSYS, headquartered in downtown Columbus, said the joint venture is with San Rafael, Calif.-based Central Payment Co. LLC, which was founded in 2005 by brothers Zachary and Matthew Hyman. The company is already a payment-processing customer of TSYS.
"We're not disclosing the purchase price for this joint venture," said TSYS spokesman Cyle Mims. "But, yes, at a certain point in time, we do have the option to buy the rest of the joint venture and make it a wholly owned TSYS company. We do have the right to do that."
Mark Pyke, president of TSYS' Merchant Services division, said in a statement that Central Payment "enhances our distribution model with its strong sales agent channel made up of more than 700 active, independent agents."
Central Payment is what is known in the payment-processing industry as a "direct merchant acquirer," a company that seeks out businesses, sets them up with credit-card swiping equipment, then carries out the authorization and completion of transactions by their clients' customers.
The company said it has more than 40,000 merchants in its portfolio nationwide, handling roughly $3.5 billion in card transactions each year. It made Inc. magazine's list of the 500 fastest-growing companies in the U.S. a couple of years ago, coming in at No. 309 with 2009 revenue of $47.2 million, according to its website.
It was in the spring of 2010 that TSYS pulled the trigger on a similar joint venture, buying 51 percent of Omaha, Neb.-based First National Merchant Solutions from First National Bank of Omaha for $150.5 million.
That led to the Columbus company gobbling up the remainder of First National Merchant Solutions in January of last year for $169.6 million, pushing the total price tag for the acquisition to $320 million. It was then renamed TSYS Merchant Solutions.
Mims said the latest deal is not on the scale of the Nebraska purchase that has boosted the company's revenues significantly over the last two years.
"All I can tell you on that is it's not as big as the FMNS joint venture was," he said. "It's smaller than that."
Aside from the 700 independent agents, who are paid by commission, Central Payment has about 130 employees on its payroll. Mims said it is reasonable to expect that TSYS will pick up 60 percent of those workers' salaries and benefits.
A credit-card and electronic payment processor doing business around the world, TSYS has more than 8,200 employees overall. About 4,300 of those earn a paycheck in Columbus.
The company's revenues have been climbing in recent quarters, generating cash flow that allows it to make strategic acquisitions such as that of Central Payment Co. TSYS Chairman and Chief Executive Officer has consistently said the company plans to make such moves to bolster its financial bottom line.
Through the first six months of this year, TSYS has racked up a profit of $123 million on revenue of $923.8 million. Those figures are up 20 percent and 5.3 percent, respectively, through the first half of 2011.
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