Global Payments Acquires Remaining 49% Interest in U.K. Merchant Services JV
Global Payments has announced that it has acquired the remaining 49% interest in its merchant services joint venture in the United Kingdom from HSBC Bank plc ("HSBC"). "In June 2008, Global Payments and HSBC formed a joint venture, HSBC Merchant Services, to provide payment processing services to merchants in the United Kingdom and Internet merchants globally. Under the terms of today's agreement, Global Payments will pay HSBC a total of USD$307.7 million in cash to acquire the remaining 49% ownership interest in this joint venture. In addition, HSBC will extend the current ten-year exclusive marketing alliance agreement whereby the bank provides merchant referrals and bank sponsorship to Global Payments to June 2019."
Global Payments' Chairman and Chief Executive Officer, Paul R. Garcia said, "We are very pleased to acquire the remaining interest in our joint venture. Our performance in the United Kingdom this year has provided a strong foundation for long-term growth, as we continue to provide a wide range of high-value payment solutions and world-class service to merchants. This transaction demonstrates the strength of our relationship with HSBC, as our partnership in the United Kingdom evolves from a joint venture to a marketing alliance. We look forward to continuing and extending our successful worldwide relationship with HSBC."
Noel Quinn, HSBC's UK Head of Commercial Banking, said, "We are focused on ensuring that our commercial banking relationships benefit from a combination of HSBC's core service capabilities, including our international distribution, and from high quality support services. Global Payments is a market leader in the provision of card processing services, whom we know well from working together in Asia and North America. Our UK customers will continue to benefit from their expertise."
Global Payments used existing cash and lines of credit to complete the transaction and anticipates the deal to be accretive in fiscal 2010 and will provide additional financial details during its fiscal 2009 year-end earnings call, currently scheduled for July 23, 2009.
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