(Reuters) - Payment processor Vantiv Inc VNTV.N said it would buy Mercury Payment Systems LLC for about $1.65 billion from private equity firm Silver Lake Group LLC to boost its point-of-sale payment systems.
Mercury, which filed to go public this year, said it was suspending its IPO plans.
The IPO was expected to value the Durango, Colorado-based Mercury at up to $2.5 billion, Reuters reported in November.
Vantiv expects the transaction to contribute 1-2 percentage points to its net revenue growth per year and to modestly add to its earnings per share in 2014.
Silver Lake bought a roughly 60 percent stake in Mercury for an undisclosed amount in 2010, leaving the rest with founders Marc Katz and Jeffrey Katz and investor Larry Stone.
Mercury’s revenue rose 17 percent to $237 million in 2013, while its adjusted EBITDA jumped 23 percent to $93 million.
Founded in 2001, Mercury grew to become one of the five largest nonbank payment processors in the United States as measured by the number of transactions.
The company targets small and medium-sized merchants such as restaurants and stores, with cheaper credit card payment solutions.
Credit Suisse, BofA Merrill Lynch were the financial advisers to Vantiv, while Morgan Stanley, JPMorgan, Barclays, and FT Partners advised Mercury.
The deal is expected to close in the second quarter of this year.
Vantiv shares closed at $29.82 on the New York Stock Exchange on Monday.
Reporting by Anil D'Silva and Abhirup Roy in Bangalore; Editing by Sriraj Kalluvila