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TSYS to Buy NetSpend for $1.4 Billion

Payment processor TSYS (TSS) is bolstering its position in the prepaid card market through big acquisition.

TSYS has agreed to buy prepaid card company NetSpend (NTSP) in a $1.4 billion all-cash deal, the two companies announced Tuesday. The deal values NetSpend at $16 per share, a premium of approximately 30% to its $12.29 share price as of the market's close on Tuesday.

The companies expect the transaction to close in mid-2013, pending regulatory approval.

Based in Austin, Texas, NetSpend sells prepaid cards through 62,000 merchant locations, and also offers corporate payroll cards. It currently has 2.4 million accounts, 46% of which are direct deposit, the news release announcing the deal said.

Houlihan Lokey and law firm King & Spalding advised TSYS on the deal. BofA Merril Lynch and Fried Frank advised NetSpend.

The Columbus, Ga.-based TSYS has been active in M&A lately, having agreed to buy payments processor ProPay in November 2012.


(1) Comment



Comments (1)
Congratulations to Dan Henry and his team. NetSpend's continuing success is the most effective response to the banking industry sycophants who disparage prepaid card companies that offer consumer-friendly alternatives to increasingly inhospitable bank accounts.
Posted by jim_wells | Wednesday, February 20 2013 at 6:49AM ET
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