Heartland Payment Systems, the Nassau Street-based payment processing company, has been acquired by Global Payment Systems in a $4.3 billion deal. The Heartland brand will remain, but the company did not say whether it would close the Carnegie Center office.
Robert O. Carr, founder and CEO of Heartland, said SEC disclosure regulations prevented him from saying anything about plans for the new company, including the fate of the Nassau Street location and its employees.
News of the cash-and-stock deal caused Heartland stock to jump 12 percent to $95.40 when it was announced on December 11. The deal makes Atlanta-based Global Payments one of the world’s largest payment processing companies.
“The combination of Global Payments and Heartland will be transformative for the worldwide payments industry,” Carr said. “Under [Global Payments CEO Jeffrey S. Sloan’s] leadership, I believe the combination of our companies will become the most valuable payments company on the planet. Heartland is excited to team with a truly international company. In the U.S., Heartland will continue to operate under its brand and under its business model of fair dealing — with the Merchant Bill of Rights and the Sales Professional Bill of Rights guiding the way to future growth and innovation.”
Carr said negotiations began several months ago when Global Payments made “the proverbial offer we couldn’t refuse.” Carr and Sloan were on a panel at an industry event, when Sloan took Carr aside to discuss “strategic matters.”
Carr has written extensively on his businesses’ philosophy of treating employees well. In his 2014 book about founding and running Heartland, “Through the Fires,” (U.S. 1, December 31, 2014.) Carr describes how he reorganized his company’s Indiana call center to make it a better place to work.
“I see it as Herb Kelleher of Southwest Airlines sees it. A business has three sets of constituents: the employees, the customers, and the shareholders. A lot of businesses like to say the customers are the most important part of the equation. That’s not my view. I believe the employees are even more important.
“If you have happy employees, they will take good care of the customers. Satisfied customers, in turn, translate to healthier corporate profits. That, naturally, will make the shareholders smile,” he wrote.
Carr said he took steps to ensure the company culture would continue under the Global Systems brand. “They’re going to use the Heartland name. We’re going to be the brand in the U.S., and they’re adopting our business model, which is really specific and unique in many ways. We felt this was the best fit for our employees.”
Carr founded Heartland in 1997 and grew it into a company that reported $2.1 billion in revenue on $80 billion in transactions as of 2014. The title of Carr’s book gives some indication of the trials and tribulations Heartland experienced along the way. In 2008, hackers hit Heartland it what was the biggest data breach in history at the time, with as many as 100 million credit card numbers being stolen. The company managed to recover from the disaster.
Carr said that selling Heartland had never been his long term business plan, but when the opportunity came along, the price was too good to pass up.
Though Carr didn’t discuss the future of Heartland, he did say that he will be leaving the company to pursue other ventures. Those include running his charity, the Give Something Back foundation. Carr’s foundation gives full scholarships to students so they can attend The College of New Jersey, Montclair University, and several other institutions and graduate debt free. He is also planning to write a second book, titled “Working Class to College,” and to found another company.
Global is paying $100 per share of Heartland stock, and Global Payments shareholders will end up with 84 percent of the combined company. The deal has been approved by the boards of both companies.
Carr said the combination of Global, which specializes in international transactions, and Heartland, which has focused on the United States, could be a powerful one. “I think the combined companies have a very legitimate opportunity to become the largest payments processor on the planet within a couple of years,” he said. “It’s very exciting for our employees to have this as a target.”
Heartland Payment Systems (HPY), 90 Nassau Street, Princeton 08542; 888-798-3131. Robert Carr, CEO. www.heartlandpaymentsystems.com.