Brookfield, Wisconsin-based Fiserv has been a frequent acquirer in payments and fintech, spending about $2 billion on acquisitions over the past two years, executives have noted. In December, the company hired Rick Singh as its enterprise growth officer; mergers and acquisitions fall under his purview.

When asked Wednesday about Fiserv’s capital allocation approach and its ability to acquire companies, Bisignano said he’s “not at all feeling constrained.”

“I don’t view this as an economic issue, like ‘Can we?’” he said. It’s more a question of whether a purchase would create sustainable value for shareholders, he said.

In considering acquisitions, the company generally veers toward “things that help drive digital capability,” or expand the company’s addressable market, Bisignano said.

Fiserv acquiring Shift4 “could make sense and be mildly accretive” to the processing-acquiring giant, Baird Equity Research Analyst David Koning wrote in a Wednesday note to investor clients. “We could see a ~$9 billion enterprise value purchase price.”

Shift4 executives haven’t been shy about expressing frustration with the company’s public market valuation in recent months, and have suggested the company may go back to being private. Allentown, Pennsylvania-based Shift4 has an established payments presence in the hospitality industry, serving restaurants, hotels, stadiums and entertainment venues with its software and payment processing services. 

When Shift4 reported fourth-quarter earnings Tuesday, CEO Jared Isaacman said the board’s “formal review of alternatives is still active and ongoing.” Isaacman told Payments Dive last November the company has fielded acquisition interest from “several parties.” Reuters reported Wednesday Amadeus IT Group is also competing to acquire Shift4. 

Shift4 could add ~1% to Fiserv’s revenue growth “assuming FOUR would grow ~15-20% in coming years,” Koning wrote in the note to investors. 

Spokespeople for Fiserv and Shift4 declined to comment.

By Caitlin Mullen on Feb 29, 2024
Original link