Tier Technologies Buying Official Payments for $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.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV