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.