MAC, Cash Station Parent Plans To Acquire Star Systems

Concord EFS, the parent of MAC and Cash Station electronic funds transfer (EFT) networks, said last week it is in negotiations to acquire Star Systems Inc., the nation's largest regional EFT network.

Edward Labry, III, the president of Concord, confirmed the merger talks last week but emphasized that no deal had been struck. Labry said the negotiations were focusing on Star, based in Maitland, Fla., becoming a subsidiary of Concord EFS.

A combination of the two networks would have enormous ramifications for credit unions as it would create an EFT giant representing more than 7,000 financial institutions, including some 2,600 credit unions. Such a system would give credit union members broader access to their funds across the U.S.

It would also resolve some of the issues surrounding ATM surcharges by expanding the reach of credit unions through a national network.

Labry did not disclose potential acquisition prices but EFT industry sources said they believe Star could be acquired for around $750 million.

The proposed combination is the latest in the rapidly consolidating EFT business.

If the deal is completed it would be the third major acquisition in the past three years for publicly- owned Concord, which acquired the MAC system in 1998, then Chicago-based Cash Station earlier this year.

Star itself, which is now owned by 49 financial institutions, is the product of a merger last year with the Honor network, acquired the year before of the Most network.

Star is currently the nation's largest regional network with more than 600 million ATM, debit and point-of-sale (POS) transactions a month, compared to about 210 million for Concord's MAC and Cash Station. The second largest EFT network is NYCE, a product of last year's combination with Magic Line, which conducts about 280 million transactions a month.

In comparison, the Co-op Network, the largest credit union-owned EFT network, conducts about 32 million transactions a month.