Heartland to Acquire the Network Services Business of Alliance Data

In addition to Visa/MasterCard acquiring, Network Services handles a wide range of payment transactions for its predominantly petroleum customer base, including providing approximately 2.6 billion transaction authorizations each year. Heartland, one of the nation’s 10 largest processors, handled $51.9 billion of total annual card volume last year.

“We are pleased to announce the acquisition of Alliance Data’s Network Services, a leader in the payment processing industry’s second largest vertical market,” said Bob Carr, chairman and chief executive officer of Heartland. “The petroleum industry’s substantial volumes, steady growth and stability in varying economic cycles are attractive characteristics of the Network Services portfolio. This purchase catapults us into a leadership position in the industry segment in which Heartland first got its start. We will be integrating the Network Services technology into the Heartland platform to achieve economies of scale and leveraging our proprietary technology to offer Network Services clients, Heartland customers and others best-in-class payments solutions.”

Heartland is paying $77.5 million in cash for Network Services. The acquisition will be financed through a combination of cash on hand and the company’s borrowing facilities. Heartland believes the acquisition will be non-dilutive to earnings in 2008 and accretive thereafter. The acquisition is expected to close within the next 30 days, subject to customary regulatory approvals.