Electronic payment company
said on Friday morning that it will be acquired by consulting firm
in a cash deal worth about $74.5 million.
Tier is expected to pay $3 a share for Official Payments, a 50% premium to the company's Thursday close of $2. The deal should begin in the next two weeks and be completed by early August.
In a press release, Tier said the deal will create new synergies, providing "an opportunity to pursue similar electronic payment processing business in other commercial areas such as tuition and utility payment processing." Official Payments also brings with it existing federal government business, as the company has been providing service to the IRS since 1999.
Tier said it expects the acquisition to generate positive pro forma earnings within the first twelve months, and the company now sees its postacquisition fourth-quarter EPS at 22 cents to 23 cents on revenue of $32 million to $33 million, in line with the consensus estimate.
The transaction is subject to shareholder and regulatory approval, and Tier said it has approval for the merger from shareholders representing 63% of outstanding Official Payments stock.
Shares of Official Payments were climbing about 45% to $2.89 in premarket trading on the news.