imgres-15TSYS announced plans to acquire Austin-based NetSpend for $1.4 billion.
Netspend, founded in 1999, sells prepaid debit cards and other financial services to customers without bank accountants in the United States.
The deal calls for TSYS, based in Columbus, Georgia, to pay $16 in cash for each share of NetSpend common stock.
NetSpend, which sells its prepaid debit cards at more than 62,000 retail locations, is also a leading provider of corporate payroll card solutions, and has a direct distribution channel to reach consumers through online, mobile and direct marketing sources. It has more than 2.4 million accounts.
“The NetSpend acquisition is truly a transformational event for TSYS and consumers alike. It enables us to meet our strategic goals of diversifying our business, being a more innovative payment solutions provider and expanding our role within an area of payments that is expected to grow at a 20% annual rate over the next four years*. The acquisition also complements our already strong presence in the prepaid processing space,” Philip W. Tomlinson, chairman of the board and chief executive officer, TSYS said in a statement. “By acquiring NetSpend, we gain a leadership team with deep prepaid experience, a company with scalable technology and a differentiated product offering customized for the partners and channels they serve. NetSpend’s mission is to empower consumers with the convenience, security and freedom to be self-banked, and this promise aligns with TSYS’ people-centered payments approach that is expected to add significant capabilities in terms of future revenue growth for our companies.”
“With the strength and resources of TSYS, our opportunities are endless,” Dan Henry, chief executive officer of NetSpend, who will join the TSYS executive team, said in a statement. “I can’t think of a better, more strongly positioned industry leader who can help us take NetSpend to the next level. We bring a meaningful, fast-growing business to TSYS, and we will be able to offer our unique products and services to the unbanked consumer faster than ever before. We have built such an amazing team here at NetSpend, and we are excited to be the newest addition to TSYS.”
The transaction is expected to close in mid-2013, subject to regulatory and shareholder approval.