Tier Technologies, a Walnut Creek, Calif., IT consultant, will buy Official Payments, a Stamford, Conn., online billing specialist, for about $75 million in
cash.
“(The deal) adds 1,200 state and local government clients, a new major contract with the IRS, a proven proprietary platform and a state-of-the-art data center to
our business,” said James L. Bildner, Tier’s chairman and CEO.
In 2001, the Internet and telephone payment services operated by Official Payments processed more than 225,000 federal tax payments totaling nearly $800 million,
representing an 87 percent market share of credit card payments made to the IRS.
In addition, Tier adds new business lines such as state and local taxes, fees, fines and utility payments. The transaction, which has the support of both companies’
directors, is expected to close within two weeks.
It is expected that Tier will retain the Official Payments brand, as well as its existing sales, marketing, engineering and customer service operations and data center.
“By joining forces with Tier, we believe that Official Payments gains the ability to move to a new level of revenue and earnings growth,” said Thomas R. Evans,
Official Payments’ chairman and CEO.
Shares of OPAY jumped 0.95, or 47 percent, to 2.95 on the buyout news. TIER stock was off 0.15, or less than 1 percent, to 16.7.