ACI Worldwide has agreed to lay out $750 million in cash to buy Speedpay Inc., the digital bill-payment business that has been part of The Western Union Co. for 17 years. The deal, announced early Thursday, will bulk up ACI’s bill-payment processing business at a time when trends like digital subscription billing and real-time payments are sweeping through the industry. The transaction should close by June 30, the parties said.
Naples, Fla.-based ACI said it plans to combine Speedpay and its approximately 270 bill-pay clients with ACI’s UP Bill Payment platform in a unit that will ultimately process “billions” of transactions. Speedpay has been chiefly focused on the U.S. market, which accounted for 15 billion bill-pay transactions last year for all providers, a volume that is growing at “steady mid-single-digit rates,” according to ACI’s announcement of the deal.
ACI officials Thursday indicated wider ambitions for the combined unit. “This acquisition … accelerates our ability to capitalize on the growing global payment transaction opportunity over the next five years,” said Phil Heasley, ACI’s chief executive and president. “It presents a great opportunity for ACI to strengthen and add scale to our On Demand business, and provides fuel for growth and increased [research-and-development] investment which will benefit both ACI and Speedpay customers.” The On Demand business enables payments in a software-as-a-service format.
Founded in 1989 and acquired by Western Union in 2002, Speedpay is generating $350 million in annualized revenue and $90 million in earnings before interest, taxes, depreciation, and amortization, according to figures provided by ACI.
Western Union, which was part of First Data Corp. at the time it acquired Speedpay, is divesting the business so it can concentrate on its mainline international business, said Hikmet Ersek, chief executive and president of the Denver-based money-transfer giant. “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,” he said in a statement.