Santa Ana-based Banc of California Inc. (NYSE: BANC), the second largest bank headquartered in Orange County, said it has acquired the payments platform and technology of Global Payroll Gateway, Inc. and its wholly-owned subsidiary, Deepstack Technologies LLC, for $24 million in cash and stock.
Deepstack, which is headquartered in Jupiter, Fla., with a team located in Southern California, is an e-commerce payments platform that provides clients with services like merchant processing, tokenization and fraud protection tools.
The acquisition adds a “high margin source of stable, predictable fee income” and diversifies the bank’s revenue mix while increasing non-interest income as a percentage of revenue.
“The acquisition of Deepstack expands our business into payment processing and furthers our strategy to grow fee-based income in a scalable and meaningful way,” Banc of California Chief Executive Jared Wolff said in a statement.
The bank paid 70% in cash and 30% in stock using the 20 trading-day volume weighted average closing price of $17.46 per share. The transaction is expected to be neutral to consensus earnings in 2023 and accretive thereafter.
All of Deepstack’s employees have joined the bank and its three executives have entered into three-year employment agreements with the bank.
Shares of Banc of California were unchanged in after-hours trading at $17.28 and a $1 billion market cap.
