Gensar Holdings Inc., a merchant processing company based in Philadelphia, has gobbled up a competitor.
On Wednesday, Gensar said it purchased POS Technologies from the owner of the Honor automated teller machine network.
Terms of the deal were not disclosed.
Bipin Shah, president and chief executive of Gensar, called the deal, "the acquisition of a similar type of business."
Gensar, with 100,000 merchants and terminals in the market, processes 300 million transactions a year. It said the purchase will add 16,000 merchants and 18 million transactions.
Southeast Switch Inc., which owns Honor, created POS Technologies in 1993 as a way to diversify.
A spokeswoman for the Maitland, Fla.-based network said its pending merger with the Most network, owned by Internet Inc., of Reston, Va., had no impact on the decision to sell the unit.
While POS Technologies, a division of Southeast Switch's Specialty Network Services, served merchants, "our services tend to be financial institution oriented," said the spokeswoman, Betsy Storm.
The sale will "allow us to get back to the roots of debit-related businesses, like Honor and off-line debit processing," she said, noting that merchant processing is a credit card driven business.
POS Technologies, which had been based in Atlanta, was moved this week to Gensar's facilities in Tampa. Some of its 25 employees have been offered jobs with Gensar or Southeast Switch. It is not clear how many will choose to relocate.
POS Technologies' processing system, including hardware and software, will be integrated into Gensar's system by the end of the month, said Mr. Shah.
Mr. Shah said Gensar, which competes with First Data Corp., National Data Corp. and Vital, Total System Services' new venture with Visa, wants "to provide end-to-end service to merchant locations with competitive products and services at competitive prices."
Beth Costa, senior associate for Dove Associates, a Boston-based consulting firm, said the acquisition was a good move for Gensar.
"As they're able to build more transactions, they'll become a stronger player," said the consultant, who once worked with Mr. Shah at Gensar. "In this business scale is the name of the game."
Even so, some industry observers said the long-term viability of small processors like Gensar is questionable, since they cannot beat the prices of their larger competitors.
