DENVER - CSG (NASDAQ: CSGS) has completed the acquisition of iCheckGateway.com, LLC (iCG Pay), a payment processing company specializing in ACH and credit card transactions, as part of its strategy to expand and diversify its business. The acquisition is expected to contribute positively to CSG's profitability in 2024.
iCG Pay, known for its strong presence in industries with high recurring revenues such as financial services, insurance, utilities, and government sectors, has demonstrated consistent double-digit organic revenue growth. In 2023, the company reported revenues of approximately $9.5 million, after deducting transaction fees. CSG has acquired iCG Pay for an upfront payment of $17 million, with additional performance-based earn-out provisions.
The integration of iCG Pay's merchant customer base and its ISV channel partnerships is anticipated to enhance the combined offerings of both companies, providing an improved payment processing solution to their clients. The acquisition also brings a seasoned team of payment industry professionals to CSG, expected to strengthen the company's position in the North American payments market.
Brian Shepherd, president and CEO of CSG, expressed enthusiasm about the acquisition, highlighting the alignment with CSG's customer-focused and culture-driven ethos. He emphasized that the move illustrates the company's commitment to growth that benefits shareholders, customers, and employees.
CSG, a company that delivers customer experience, billing, and payment solutions, aims to assist businesses of various sizes in managing and monetizing their services. The addition of iCG Pay is in line with CSG's strategy to offer comprehensive SaaS solutions to its clients.
The acquisition is based on a press release statement from CSG.
InvestingPro Insights
In light of CSG's (NASDAQ: CSGS) recent acquisition of iCheckGateway.com, LLC (iCG Pay), insights from InvestingPro reveal a mixed financial picture for the company. With a market capitalization of approximately $1.2 billion and a P/E ratio standing at 19.34, CSGS shows stability in its valuation metrics. However, a closer look at the adjusted P/E ratio for the last twelve months as of Q1 2024, which is at a slightly lower 16.12, suggests a potential undervaluation relative to the company's earnings.
InvestingPro Tips highlight the company's consistent commitment to shareholder returns, with management aggressively buying back shares and having raised its dividend for 11 consecutive years. Additionally, CSGS has maintained dividend payments for an impressive 12 consecutive years, reinforcing its reputation as a reliable dividend payer. The dividend yield as of 2024 stands at a healthy 2.78%, and the company has seen a dividend growth of 7.14% over the last twelve months as of Q1 2024.
Despite some analysts revising their earnings downwards for the upcoming period, CSGS has been profitable over the last twelve months, and analysts predict the company will remain profitable this year. This could suggest that the acquisition of iCG Pay may further bolster CSG's financial performance and market position in the payment processing sector. Prospective investors and current shareholders can find additional InvestingPro Tips to guide their decisions on the company's future at https://www.investing.com/pro/CSGS. There are 10 more tips available, which can be accessed with a subscription. For a limited time, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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