By Amy-Jo Crowley and Manya Saini
Oct 30 (Reuters) - US private equity CD&R is exploring a deal to take payments processor Global Payments private, according to a source familiar with the deal.
The talks are at an early stage and may not materialize, the source said. Shares of Global Payments rose more than 11% in afternoon trading.
CD&R has teamed up with private equity group GTCR, Global Payments' biggest shareholder, on a joint bid that would rank among the largest leveraged buyouts in history, the Financial
Times reported earlier in the day.
CD&R and GTCR declined comment, while Global Payments did not immediately respond to Reuters request for comment.
"We find the idea credible given that GTCR owns roughly 15% of GPN shares at $97. However, Global Payments' nearly $22 billion of net debt could be an impediment, especially in a rising rate environment," said William Blair analysts in a note.
"If a deal happens it would likely signal another M&A wave that could leave the market devoid of public traditional fintechs," the analysts said.
In 2025, Global Payments agreed to buy rival Worldpay from FIS and GTCR in a deal valued at more than $24 billion. The acquisition sent its shares tumbling as investors balked at the price tag and the additional debt burden.
Later that year, activist hedge fund Elliott Investment Management built a sizable stake in Global Payments, adding pressure on the company to justify the deal.
The backlash reflected investor frustration with a takeover that appeared to run counter to the management's promises to focus on divestments and returning cash to shareholders.
The Global Payments stock has fallen more than 60% from its record high in 2021. The company has a market value of roughly $23 billion, according to LSEG data.
The payments industry has become increasingly competitive, with traditional players facing pressure from upstart fintech firms, technology companies and newer digital payment providers.
The competition has weighed on valuations of some established players, making them potential acquisition targets for private equity firms and strategic buyers looking to capitalize on depressed share prices, established customer bases and the growing importance of digital payments.
Earlier this year, Stripe and private equity firm Advent International offered to acquire payments giant PayPal in a deal valued at roughly $53 billion, Reuters reported.
The proposed price tag, a fraction of PayPal's peak market capitalization, reflected years of pressure on its stock, driven in part by competition in the payments industry. The talks have since reportedly stalled over the discount.
(Reporting by Manya Saini in Bengaluru and Amy-Jo Crowley in London, Additional reporting by Prakhar Srivastava in Bengaluru ; Editing by Shailesh Kuber and Arun Koyyur)
