Global Payments Inc., one of the largest merchant processors in the United States, expects double-digit revenue growth over the next few years, mainly through foreign acquisitions, an executive said Tuesday at an investor conference.
"We concluded some time ago [that] in the U.S. market, you will never get tremendous synergy," because of market saturation and cutthroat competition, James G. Kelly, Global Payments' chief financial officer, said at the Merrill Lynch Computer Services and Software Conference in Santa Monica, Calif. "Spending money domestically is not strategic. As we look around the world, the first question is opportunity for growth."
Mr. Kelly said several company principals, including himself and Paul Garcia, the chairman and chief executive, spend much of their time scouting international growth opportunities.
The Atlanta company, the fourth-largest processor in the United States and the second-largest in Canada, is in the process of acquiring a 52.6% stake of Muzo AS from Komercni Banka AS, an acquirer based in Prague. In 2001 Global Payments acquired the merchant services business of National Bank of Canada, that country's sixth-largest bank.
Eastern Europe, Australia, and Latin America are particularly promising targets, he said. "We've passed on a lot of opportunities" in emerging markets; only one of every 20 are worth pursuing. Global Payments has the field largely to itself when evaluating acquisitions - usually the only other potential bidder is First Data Corp., the largest U.S. processor.
Global Payments plans to make domestic purchases only in the remittance business. The mom-and-pop money transfer operators Global Payments is interested in buying are "having a hard time" meeting the USA Patriot Act's stringent anti-laundering provisions and could be looking to sell, Mr. Kelly said.
Last year, Global Payments entered the remittance market by buying DolEx Dollar Express Inc., a Latin American money transfer company based in Arlington, Tex., for $190 million.
