ReD to be Acquired by ACI Worldwide for $205 Million, as Fraud Expertise Becomes Hot

With the global e-commerce market forecast to grow over 17% a year, representing a total value of almost $2.4 Tn by 2017, fraud prevention is becoming a big issue in the industry. With that in mind, on 21st July 2014, ACI Worldwide, a leading global provider of electronic payment and banking solutions, announced that it had entered into a definitive transaction agreement with Retail Decisions (ReD), a leader in fraud prevention. Under the terms of the deal, ReD will be acquired by ACI Worldwide for $205 Mn.

Retailers are currently operating disparate systems for their online, mobile and point-of-sale operations, stated the president and CEO of ACI Worldwide, Philip Heasley, in a press release. ACI and ReD together have an unrivaled merchant retail solution – global, omni-channel with integrated fraud management built on Universal Payments technology. This solution will not only guarantee a consistent, unified customer experience in any retailer modality, but also will be a key part of our real-time commerce, any-to-any transaction strategy. Additionally, ReD’s consortium models, business intelligence offerings, modeling and risk analyst expertise will both complement and enhance our issuer risk management solutions.

  • ACI plans to use the existing credit facility as well as an incremental term loan.
  • The transaction is subject to customary closing conditions.
  • BofA Merrill Lynch is acting as financial advisor to ACI Worldwide in connection with the transaction and is also the lead arranger, providing a commitment for 100% of the financing.
  • William Blair is acting as financial advisor to ReD.
  • If the deal closes in the middle of the third quarter 2014, ACI says it expects that ReD will generate approximately $18 Mn in revenue and $4 Mn in adjusted EBITDA for the remainder of 2014.
  • The company said that further details of the financial impact of the transaction will be provided after closing.
  • ReD says that its multidimensional detection engine and proprietary global fraud database help generate high customer-retention rates and strong revenue growth.
  • According to ACI, ReD’s technology and software bring a proven, global SaaS-based e-commerce offering with integrated fraud detection/management.
  • The company states in its press release that, with the acquisition of ReD, it will become the market leader in the rapidly growing payments-risk-management market across multiple segments globally.

We are extremely excited to integrate our leading technology into ACI’s revolutionary Universal Payments, stated ReD CEO Paul Stanley in the same release. Together, we will deliver a much more powerful offering that will materially expand the adoption of integrated fraud prevention solutions.

About ReD

Brookwood, England-based Retail Decisions is a leading e-commerce and fraud-prevention company serving the payments industry. The company’s suite of solutions include ReD Shield, ReD Fraud Xchange, ReD PRISM, ReD Alerts, ReDi, ReD1 Gateway and LiveProcessor. The company says that its solutions enable customers to increase revenues while reducing fraud losses and increasing the efficiency of their fraud-management teams. ReD serves retailers, issuers, acquirers, processors and switch networks globally.

About ACI Worldwide

ACI Worldwide, a universal payments company, powers electronic payments and banking for over 5,000 retailers, financial institutions, processors and billers around the world. ACI software processes $13 Tn each day in payments and securities transactions for over 250 of the leading global retailers and 21 of the world’s 25 largest banks.