Robbins Arroyo LLP: Acquisition of Heartland Payment Systems Inc. (HPY) by Global Payments Inc. (GPN) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Heartland Payment Systems Inc. (NYSE: HPY) by Global Payments Inc. (NYSE: GPN). On December 15, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Global Payments will acquire Heartland Payment Systems. Under the terms of the agreement, Heartland Payment Systems shareholders will receive 0.6687 of a share of Global Payments and $53.28 in cash for each share of Heartland Payment Systems common stock they own, the value of which is equivalent to $100.00 per share of Heartland Payment Systems.
Is the Proposed Acquisition Best for Heartland Payment Systems and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Heartland Payment Systems is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $100.00 merger consideration represents a premium of only 27.9% based on Heartland Payment Systems’ one-month average closing price prior to rumors of the deal surfacing in the media on December 10, 2015. This premium is significantly below the average one-month premium of nearly 39% for comparable transactions within the past five years.
On October 30, 2015, Heartland Payment Systems reported strong earnings results for its third quarter 2015. Net revenue for the quarter was $214.6 million, an increase of 26.7% compared to the same period last year. Net income for the quarter was $23.9 million, an increase of 18.5% compared to the same period last year. Additionally, Heartland Payment Systems has beat consensus analyst estimates for adjusted EPS, adjusted net income, and sales in three out of its past four quarters. In commenting on these results, Heartland Payment Systems’ Chairman and Chief Executive Officer Robert O. Carr remarked, “The strong momentum in new margin installed, transaction processing and net revenue growth continues to drive record earnings. Our new business growth was outstanding this quarter, with new margin installed up nearly 30%, one of the fastest rates of new business growth in many years, and this growth was accomplished from a much higher base. Our success this quarter was driven by the growth and productivity of our sales organization, our focus on complementary acquisitions, an improvement in consumer spending, and our innovative new technologies and products, such as Heartland Secure. We also had our best operating margin in nearly two years, consistent with our expectations and a reflection of the solid operating leverage inherent in our business model. We will continue to invest in our strategy, providing small and mid-sized merchants the same best-in-class solutions as the largest merchants, to help them improve their business, while building the value of the Heartland franchise.”
In light of these facts, Robbins Arroyo LLP is examining Heartland Payment Systems’ board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Heartland Payment Systems shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Heartland shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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