TSYS to Buy NetSpend for $1.4 Billion

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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.

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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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