Global Payments often operates below the radar, but the fintech stock may attract greater attention on Thursday, when it is scheduled to release third-quarter results. The focus comes amid reports the company is in talks to go private. Such a deal could rank among the largest leveraged buyouts ever, though Wall Street remains divided on whether it will happen. The coverage continues to view Global Payments as a solid value, citing its substantial free cash flow yield and deeply discounted valuation. In March, the team had questioned whether the company would become a target as deal-making momentum returned to the sector. It also pointed to the company’s turnaround potential after its Worldpay acquisition, which created the largest U.S. payment processor and broadened its European presence. Since then, shares have risen roughly 45%.
The move higher included a 13% jump on Friday after the Financial Times reported that Clayton Dubilier & Rice was partnering with GTCR, Global Payments’ largest shareholder, to evaluate a deal. The report, citing people familiar with the matter, said details about the scale and funding had not yet surfaced as talks proceeded and might not produce a transaction.
Before the deal speculation, Global Payments shares had been stuck in a multiyear slump as some shareholders opposed the Worldpay acquisition, and activist investor Elliott Management had taken notice. As a standalone company, Global Payments shares could rise as the company integrates Worldpay, expands margins and applies its substantial free cash flow to share buybacks and deleveraging. Global Payments was set to release quarterly results on Thursday, a timing that could also be used to announce a deal. Without an immediate agreement, the company could confirm whether talks took place and offer an update on operations and outlook.
The payments space has recently drawn significant deal interest. Private equity firm Hellman & Friedman was reported in February to be negotiating a takeover of Bill Holdings. Although no agreement emerged, Bill Holdings shares were still trading about 40% above preannouncement levels. In July, Stripe and private equity firm Advent International made a cash offer to acquire PayPal at $60.50 per share, a 28% premium to PayPal’s closing price before the offer was disclosed. PayPal reportedly considered the bid too low, and Stripe and Advent eventually withdrew. PayPal shares have since risen about 23%.
Priority Technology agreed to be acquired in a management-led buyout for $8.05 per share in September, a 65% premium to its unaffected stock price. The activity adds credibility to a possible Global Payments buyout and helps set valuation benchmarks.
Deal or no deal? TD Cowen analyst Bryan Bergin said the possibility of a Global Payments LBO appears “plausible,” given GTCR’s roughly 16% stake in Global Payments and its “material knowledge” of Worldpay. The private equity group inherited its stake through its 2024 acquisition of a 55% stake in Worldpay. If GTCR combined its Global Payments shares into the new company, it would reduce the financing needed. Funding the transaction is one of the biggest hurdles. “Global Payments’ nearly $22B of net debt (almost 3.7x CY27E EBITDA) could be an impediment, especially in a rising rate environment,” William Blair analyst Andrew Jeffrey wrote. Jeffrey put the odds of deal completion “comfortably below 50%.” However, Deutsche Bank analyst Nate Svensson noted Global Payments’ scale, free cash flow generation and depressed stock multiple “create an increasingly compelling value proposition for private capital, particularly if potential bidders are willing to look through the near-term integration period and underwrite the longer-term earnings power of the combined company.” Svensson added that a private structure would allow Global Payments to “prioritize longer-term value creation without the same degree of scrutiny around near-term growth, margins, and capital allocation.” On the downside, he said, “The incremental debt/preferred equity would make it harder to generate the necessary returns and increase execution and de-leveraging risk.”
Analysts’ buyout models. Despite those valuation anchors, analysts are divided over how much a financial sponsor might pay for Global Payments and what the company and its long-term shareholders might accept. Different growth, cost savings, multiple and margin improvement projections can lead to a wide range of expectations. Here is what some Wall Street analysts have modeled.
Truist estimated a take-private price below $100 per share. “Our LBO model suggests that CD & R / GTCR & its co-investors would not pay more than $100 per share for Global Payments if they model to a minimum IRR of +15%,” writes analyst Matthew Coad.
William Blair estimated about $101 per share. BMO estimated about $102.86 per share. Analyst Andrew Bauch assumed a 20% premium in his model. Raymond James set a target of $110 per share. The willingness of sophisticated financial sponsors to explore acquisitions of scaled payment processors “reinforces the potential disconnect between public market valuations and the long-term cash flow generation of these businesses,” analyst Madison Suhr wrote.
KeyBanc said a price of at least $115 to $120 per share or more. Oppenheimer estimated $108 to $130 per share. Wolfe estimated about $120 per share. Baird estimated about $110 to $130 per share. Analyst David Koning’s take-out price range reflected 7.9 to 8.5 times 2027 estimated EBITDA, a similar multiple to the PayPal premium.
B. Riley estimated $84 to $190 per share. Analyst Hal Goetsch saw a wide range of outcomes but expected long-term shareholders to push back at the low end. “We believe GPN is materially mispriced,” he said. “If this bid is credible, we think the final price would be significantly above current prices.”
What to watch next. Ultimately, $105 to $110 per share might be the sweet spot of the range that offers enough premium to appease shareholders such as Elliott Management while not burdening the new company with unsustainable debt. On Tuesday, Global Payments disclosed it amended its bylaws, making the Georgia State-wide Business Court its exclusive forum for internal entity claims, a tactical governance shift that simplifies the legal battlefield ahead of any potential deal by eliminating local forum shopping for shareholder suits.
In the absence of a deal, Morgan Stanley analyst James Faucette said investors should look to Thursday’s earnings report for improvement in its Middle East market, which has been under pressure; the impact from the removal of the European de minimis tax; and for “healthy underlying demand trends.” Ahead of the results, Wolfe Research analyst Darrin Peller raised his price target to $120 from $113 per share, citing the company’s progress with its Genius point-of-sale product, which consolidated 16 legacy POS brands onto a single platform. “We remain constructive on GPN’s standalone investment thesis,” he wrote.
