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Dive Brief:
- Payment processing company Shift4 Payments announced plans to buy point-of-sale company Revel Systems during a first-quarter earnings call last Thursday. The processor will pay $250 million in cash and hopes to close the deal by July 1, President Taylor Lauber said by email.
- The acquisition will allow Shift4 to cross-sell payment services to Revel’s customers, CEO Jared Isaacman said on the call with analysts. Revel point-of-sale terminals are currently in about 18,000 merchant locations and represent a $17 billion payment opportunity, according to Shitf4’s Q1 earnings shareholder letter.
- “You don’t need two restaurant products,” CEO Jared Isaacman said on the call, adding that Shift4 would “take the best capabilities out of Revel” and incorporate them into its SkyTab POS system.
Dive Insight:
Allentown, Pennsylvania-based Shift4’s proposed acquisition of Revel is the latest in a string of additions by the company. During the call, Isaacman said the deal was in line with Shift4’s acquisitions last year of sports and entertainment unit Appetize and point-of-sale software firm Focus POS.
Atlanta-based Revel, privately-held, provides iPad-based POS systems to restaurants and specialty retailers and is led by CEO Greg Dukat, according to its website. The company raised $100 million in 2014 to supplement earlier funds. It raised another $13.5 million the following year and valued the business at $500 million, according to a report from the trade publication Venture Beat.
Isaacman explained that Revel was a software company for which “payments was somewhat of an afterthought until the last couple of years.” The acquisition presents Shift4 with the opportunity to sell to Revel clients and benefit from a combined sales effort in the U.S., with partners in Europe, he told analysts on the call.
Isaacman also noted during the call that the company would “delete the duplicative product offerings.”
Lauber, who is also Shift4’s chief strategy officer, declined to comment during the call on what would happen to Revel employees if the deal were to go through, citing restrictions on what the company can say while the proposed acquisition is still subject to during regulatory review.
Revel spokesperson Jason Cigarran also declined to comment on the terms of the deal.
Shift4 has, itself, entertained acquisition offers from “several parties,” Isaacman said last November as part of a review of its strategic options. He reiterated that last week.
“The Board received multiple formal offers from strategic parties at a share price premium materially higher than levels at the time of the review and certainly where we are trading presently,” Isaacman said in the shareholder letter.
The company’s leadership has been openly frustrated about its public market valuation, and Isaacman suggested in 2022 that Shift4 could revert to being a private company. It sold shares to the public in June 2020.
“As the founder and largest shareholder, it should be obvious that a go-private option is usually available and others have clearly shown that to be the case,” he said in the latest shareholder letter. “However, the go private option presents clear complexities alongside competing strategic offers. I always want my interests completely aligned with the rest of my fellow shareholders.”
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