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Company: Global Payments Inc (GPN)
Business: Global payments is a payment technology company providing software and services to its customers worldwide. Thanks to its segment of market solutions, it provides payment technologies and software solutions globally to small and mediation companies and to select intermediate and business market customers. It offers authorization, settlement and financing, customer support, recharge resolution, reconciliation and dispute management services, terminal, sales and deployment, payment security, billing and consolidated reports. It offers a range of business management software solutions that rationalize commercial operations to customers in many vertical markets. Thanks to its segment of issuing solutions, it provides financial institutions and retailers to manage their card portfolios. It provides flexible commercial payments, alternative payment solutions and electronic payments that support B2B payment processes for businesses and governments.
Market value: $ 19.98B ($ 81.93 By action)
Global payments in 2025
Activist: Elliott Investment Management
Possession: n / A
Average cost: n / A
Commentary on the activist: Elliott is a very successful and clever militant investor. The company team includes analysts from the main technological capital -investment companies, engineers, operational partners – former CEOs of technology and coos. When assessing an investment, the company also hires specialized consultants and general management, expert cost analysts and industry specialists. Elliott often looks at companies for many years before investing and has a large stable of impressive candidates from the board of directors. The company has historically focused on strategic activism in the technology sector and has been very successful with this strategy. However, in recent years, its activism group has developed and Elliott has done much more activism oriented towards governance and has created value from a level of advice to a large extent of companies.
What’s going on
Elliott has taken up position in global payments.
Behind the scenes
Global Payments is one of the main providers of payments and software processing solutions, focusing on the commissioning of small and merchants and select customers on the intermediate market and businesses. The company operates through two segments: market solutions and issuing solutions. Mercihant solutions, contributing to approximately three -quarters of total sales, provides payment solutions to allow customers to accept card, check and digital payments, offering authorization, settlement, financing and other services. In simple terms, Global Payments, as a merchant acquire, acts as an intermediary between trade and the card network to authorize and facilitate transactions. Thanks to its segment of issuing solutions, Global Payments provides complete trade solutions supporting the payments ecosystem for issuers thanks to offers such as basic processing, business tokenization and more. This segment was formed in 2019 following the combination of global payments and total system services (“tsys”) in an all-store merger of equals to create a main payment company involved in the acquisition of merchants and issuing services.
Peaking in 2021 at around $ 220 per share and a business value for the benefit before interest, taxes, depreciation and damping (EV / EBITDA) of approximately 25 times, the company is negotiated today about $ 80 per share and a multiple to a high figure. The company managed to walk on the water during the pandemic despite the global slowdown in transactions and its accent on small and medium -sized enterprises. However, sales growth has slowed considerably since 2020, now below the high growth rate of the basic acquisition market, which implies the loss of market share for disruptors like Stripe, Fiserv’s Clover, Shopify and others. All this is very interesting, but not what this campaign of activists is. It is a company that has made an unheeded acquisition “Bet the Farm” and is now at a inflection point that will determine its future.
On April 17, Global Payments announced that it had agreed to acquire Worldpay from Fidelity National Information Services (FIS) and the investment company GTCR. The cash and sharing acquisition of three also involved global payments to deactivate its issuer activities (previously known as TSYS) FIS in an agreement that estimated Worldpay at 24.25 billion dollars and emitting solutions at $ 13.5 billion. Global Payments’ shares dropped by 17% after the announcement for many good reasons: (i) This acquisition was announced after management commitments during their 2024 investor day to continue shareholder yields, desintensions and, at most, acquisitions at low terminals the acquisition at 10.5 times the Ebitda compared to the 6.5 times multiple transactions in. In addition, investors have become skeptical about the agreements of this type in the payment space after two of the three most important agreements concluded in a 2019 consolidation wave were unrelated (world payments – TSYS and FIS – Worldpay).
But the good news is that failure is a price. Management thinks that the Worldpay transaction is logical for world payments, simplifying its business model in a supplier of pure game trade solutions, and that it will provide $ 600 million in annual cost synergies and 200 million dollars in income synergies. The market does not believe this or has little faith that management can achieve these synergies. Hence the actions are negotiated today, if management can be closer to the achievement of these synergies and execution on this transaction, it will be a good return for shareholders. What this company is currently needing is execution aid and increased credibility, and Elliott can provide both.
There are companies that could use the representation of shareholders on the board of directors and the companies that need them. Global payments are much closer to the latter. A reconstituted board of directors which holds responsible management, undertakes a moratorium of mergers and acquisitions and adds to the members an experience of integration of large acquisitions will almost immediately restore the confidence of investors in the company. Subsequently, the Board of Directors can start to undress and possibly buy actions at the appropriate time if the actions of the world payments are still considerably undervalued. We would also expect the board of directors to do the most important thing that the boards of directors do – supervise and assess senior management, but we do not think that there would be changes in equipment management before such an important acquisition like this.
Given the almost universal opposition to the acquisition of Worldpay and the low confidence of investors in management, we would expect Elliott to be able to walk on this board of directors with any reasonable slate. In a contested situation for the unit board of directors of 10 people using a universal proxy card, global payments would almost certainly face a significant defeat. Elliott recently won two of the four seats in Phillips 66 in a proxy fight with a much higher degree of difficulty. The fund has made its reputation as a activist almost two decades as a strategic activist for technological companies, making major returns to sell or participate in the acquisition of companies. However, Elliott has since become a much broader and complete activist in strategy, sector and geography. Today, the company often does its best activism of the level of the board of directors. We believe that a reconstituted board of directors which includes an Elliott representative will restore the confidence of investors and increase the probability of successful integration of Worldpay.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholders’ activism, and the founder and portfolio manager of the Activist Fund 13D, a common investment fund that invests in a 13D activist investment portfolio.
