It’s Official: TSYS Closes $1.4 Billion NetSpend Buy (July 1, 2013)
July 1, 2013
Payments processor TSYS has completed its $1.4 billion acquisition of GPR and payroll card provider NetSpend Corp., the company said today. First announced in February, the deal was billed as a “transformational event” for TSYS, and gives the Columbus, Ga.-based firm a major foothold in the program management arena, bringing more than 2.4 million prepaid accounts, 500 retail distributors and 130,000 reload locations under its umbrella, while also beefing up its prepaid processing business. With the deal closed, NetSpend will remain based in Austin, Texas, operating as a wholly owned subsidiary of TSYS. NetSpend CEO Dan Henry and President Chuck Harris will continue to lead the new TSYS subsidiary, which will report directly to Troy Woods, president and COO of TSYS.
The NetSpend acquisition “takes TSYS closer to the consumer than we have ever been before,” said Philip Tomlinson, chairman and CEO of TSYS. Bringing NetSpend’s program management into the TSYS fold is in line with the company’s strategy of expanding its role in the payments value chain, enabling TSYS to provide a wider range of services to its clients, Tomlinson added. Meanwhile, the relationship with TSYS boosts NetSpend’s ability to compete in a prepaid market increasingly drawing the attention of major banks and financial institutions.
Under terms of the acquisition, NetSpend stockholders will receive $16 in cash for each share of NetSpend common stock. The deal hit a potential snag in late May, when NetSpend announced it would postpone a scheduled shareholder meeting to finalize the sale to allow time to consider other proposals and announce modifications to the TSYS sale terms. However, NetSpend shareholders approved the deal by a wide margin during the rescheduled meeting on June 18. A pair of shareholder lawsuits also threatened the deal, but one was settled and the other was thrown out by a Delaware judge.