ACI Worldwide has agreed to acquire Speedpay, the US domestic bill pay business of The Western Union, for $750m in an all-cash deal.
Image: ACI Worldwide to acquire Speedpay. Photo: courtesy of John Phelan/Wikipedia.org.
Speedpay is a provider of electronic bill presentment and payment solutions to various business sectors in the US such as utilities, auto finance, mortgage, consumer finance, telecommunications, insurance and government finance.
In 2018, the bill pay business earned revenue of more than $350m and $90m in adjusted EBITDA.
Western Union president and CEO Hikmet Ersek said: “Divesting the Speedpay business allows us to concentrate our resources on our cross-border money movement strategies and monetize a non-core asset for our shareholders.
“Our strategy remains focused on expanding our digital services, leveraging our platform to unlock new cross-border, cross-currency payments opportunities, and generating additional operating efficiencies.”
For ACI, the transaction combines two bill pay portfolios in the quickly-evolving US electronic bill pay and presentment (EBPP) market. It expects the combination’s bill pay solutions to serve over 4,000 customers in the US.
Furthermore, the acquisition will bring expanded presence in existing and complementary segments including consumer finance, insurance, healthcare, utilities, higher education, government and mortgage, said ACI. The company said that this will help the combined business to more effectively cater to a quickly-evolving category and also pursue additional vertical segments.
According to ACI, the transaction will enhance the scale of its On Demand platform business and will speed up platform innovation through increased spend on research and development and investments in its On Demand’s platform infrastructure.
ACI plans to club the Speedpay and UP Bill Payment platforms into a unified bill payment platform.
ACI president and CEO Phil Heasley said: “This acquisition reinforces ACI’s “any payment, every possibility” vision and accelerates our ability to capitalize on the growing global payment transaction opportunity over the next five years. It presents a great opportunity for ACI to strengthen and add scale to our On Demand business, and provides fuel for growth and increased R&D investment which will benefit both ACI and Speedpay customers.”
Subject to customary closing conditions and receipt of regulatory approvals, the transaction is expected to be completed by the end of the second quarter of 2019.