Shift4 Looks to Its Global Blue Deal for More Expansion

Shift4 Payments Inc.’s top brass early Tuesday celebrated the long-awaited July 3 closing on its $2.5 billion deal to acquire Global Blue, a Switzerland -based international platform providing transaction services to high-end merchants.

The deal clinches a major position internationally for the acquisitive processor, executives said on a call with equity analysts. “We’re beginning to hit our stride in European markets,” noted Taylor Lauber, chief executive at the Allentown, Pa.-based company.

But the transaction, ambitious as it is, is far from quenching Shift4’s appetite for deals, executives said. “We remain opportunistic in pursuing strategic M&A,” said Nancy Disman, who announced she is retiring as the company’s chief financial officer.

The deal’s long-awaited closing came just days after the big processor closed a second quarter that featured $50.1 billion in payments volume, a 25% jump from the same period last year, good for a 17% increase in gross revenue, to $966.2 million. Now, with Global Blue finally onboard, Shift4 expects $334 million in revenue from the company in the second half of the year, Disman said.

“Global Blue adds on an entirely new market for us,” Lauber said. But under Shift4’s guidance, “We think they’ll accelerate beyond what they’ve traditionally done,” he added.

But the company has clearly developed an appetite for processing in markets around the world. In its most recent move, it agreed in June to acquire Smartpay Holdings Ltd., a processor based in New Zealand but with a growing its business in Australia. The $180-million acquisition will bring 40,000 merchants into Shift4’s fold.

For the company, Australia is the big prize and represents a market in which Global Blue is already doing business, Lauber noted. With foreign markets generally, said Lauber, “We’re applying the know-how we have in the U.S.”

Not all observers, though, are sold on Shift4’s ambitious strategy. For some, the timing is questionable. “We would like to see Shift4 deemphasize M&A and focus on operations. It has a global footprint and leading unified commerce (UC) capabilities. Now more than ever, and particularly in light of a CFO transition, we think the company needs to demonstrate its operating mettle,” wrote analysts at William Blair in a note issued before the earnings call.

Still, Shift4 has grown markedly by acquisitions over recent years, and Lauber and Disman made it plain that strategy isn’t changing with Lauber taking over from founder and former CEO Jared Isaacman. Isaacman stepped down when President Trump nominated him to run the space agency NASA, a position that ultimately went to Sean Duffy as acting administrator. Isaacman remains Shift4’s chairman.

For the quarter, Shift4 recorded $413.4 million in gross revenue, up 29%. Gross profit totaled $275.1 million, a 26% jump.