Heartland Payment Systems has boosted its payroll services by acquiring Ovation Payroll, a Rochester, N.Y.-based outsourcing company.

Heartland plans to incorporate Ovation's payroll tax preparation and administration, Internet payroll reporting and direct deposit services into its payroll business, the Princeton, N.J.-based payment processor announced Jan. 7.

The addition of the 10,000 Ovation clients to Heartland's existing 12,000 clients in payroll services provides an opportunity to "gain a distribution channel into new markets," David Gilbert, president of Heartland's hospitality group, said in a press release.

"Integrating Ovation Payroll with Heartland will allow us to further market the advantages of being the only large, public merchant advocate payroll provider offering three-year price-lock agreements," Gilbert added.

Heartland did not disclose financial details of the acquisition, which closed on Dec. 29, 2012, but did state in a press release that the purchase of Ovation will "enhance Heartland's product and service offerings to merchants in virtually all markets in which Heartland conducts business."

In a research note published Jan. 7, Thomas McCrohan, an analyst at Janney Capital Markets, said the acquisition fills a need for Heartland.

"Ancillary services, which includes payroll … continues to be a focus of Heartland Payments," McCrohan wrote. "However, all of these ancillary businesses require scale, and this payroll acquisition adds over 10,000 customers to Heartland’s existing base of payroll merchants."

Heartland says it will retain the 150 employees and executives at Ovation Payroll.

Heartland Payroll Services offers payroll processing software, Web-based payroll systems, employee self-service portals, and direct deposit and prepaid card options.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry