In a move signaling a strategic shift, American Express (NYSE: AXP) has entered into a definitive agreement to divest its wholly-owned subsidiary, Accertify, to technology-focused private equity firm Accel-KKR. The transaction terms, expected to close in the second quarter of 2024, were not disclosed.
Accertify, a leading provider of fraud prevention, chargeback management, and payment gateway solutions, boasts a clientele of 40% of the Top 100 online retailers, major global airlines, and prominent sports betting platforms. Its advanced technologies have enabled businesses to reduce fraud losses and streamline operational efficiency significantly.
The decision to divest Accertify reflects American Express’s focus on core competencies in the card payment network and merchant services sectors. “This transaction aligns with our strategic priorities and allows us to sharpen our focus on our core businesses further,” stated Kenneth Chenault, Chairman and CEO of American Express. “We are confident that Accel-KKR will be a strong partner for Accertify, providing the resources and expertise necessary to support its continued growth and innovation.”
Accel-KKR, with its proven track record in technology investing and successful large-scale corporate divestitures, expressed enthusiasm for the acquisition. “Accertify’s market-leading solutions and impressive client base make it an ideal fit for our investment thesis,” said Park Durrett, Managing Director at Accel-KKR. “We are committed to working with the talented Accertify team to unlock the company’s full potential and drive further growth in the rapidly evolving fraud prevention and payment security landscape.”
The sale of Accertify is expected to have a neutral to slightly positive impact on American Express’s earnings per share in 2024. However, the long-term implications remain to be seen. Analysts anticipate that American Express will reinvest the sale proceeds into strategic initiatives to solidify its position in the competitive card payment market.