Deluxe to buy payments processor for $960 million

On its path to diversify beyond check printing, Deluxe has agreed to purchase Texas-based merchant services firm First American Payment Systems for $960 million.

The deal for First American, one of the largest remaining privately owned payment processors with 160,000 merchants in North America and Europe, will expand Shoreview, Minn.-based Deluxe’s reach and position the company for future acquisitions, Deluxe said in a Thursday press release.

The move suggests Deluxe — which has longstanding relationships with banks — still sees strong growth opportunities in traditional merchant services.

First American sells in-store, online and mobile payment acceptance solutions through independent software vendors, banks and ISOs, while Deluxe, a century-old firm, sells promotional, cloud-based technology and check solutions. The combination will enable both companies to cross-sell a complete payments product set to all sizes of businesses and banks, the press release said.

“This is a major, logical and responsible next step in our transformation,” said Barry McCarthy, who became Deluxe’s CEO in 2018 after a long stint at First Data (now Fiserv).

“Our acquisition of First American will enable Deluxe to participate in merchant services, a part of the strong secular growth payments industry,” said Michael Reed, Deluxe’s president of payments.

The deal, which is expected to close during the second quarter, calls for First American CEO Neil Randel to become managing director of merchant services at Deluxe.