First Data Corp. is buying the Polish payment processor Polcard SA, continuing its expansion in the European payment processing market.
The Denver company said Friday that it agreed to pay $325 million in cash for Polcard, which provides merchant processing, card issuing, and automated teller machine driving services. The Warsaw company would become part of First Data's rapidly growing international division.
Pam Patsley, the president of First Data International, said in an interview Friday that of the nations that recently joined the European Union, Poland is the largest market.
It has "tremendous" growth potential," she said.
"It's an underpenetrated market in terms of electronic payments," and will have "a terrific run rate for growth," Ms. Patsley said. First Data entered Poland by opening an office in Warsaw in early March.
Ms. Patsley called Polcard a good fit with her company. Its services are "solidly, 100% in the business that First Data does," she said.
Polcard would join a lengthy list of European processors that have been acquired by First Data in recent years.
Last year the processing giant bought GZS Gesellschaft fur Zahlungssysteme mbH of Germany. In 2005 it bought Austrian Payment Systems Services GmbH; EuroProcessing International, a major card processor in Central and Eastern Europe; and the credit card processing unit of FinecoBank SpA, part of Capitalia Group.
In 2004 it bought Delta Singular Outsourcing Services SA from Delta Singular SA, a Greek technology company.
Polcard, founded in 1990, processes about 170 million transactions a year. It has a network of 58,000 point of sale terminals and manages 1,700 ATMs.
Its 2006 revenue was $44 million, according to First Data International.
The acquisition would add about 250 employees to First Data International, which has 5,000 employees in Europe and 7,900 worldwide.
Polcard is owned by Innova Capital, a private-equity firm, and GTECH, a gambling technology and payment company owned by Lottomatica SpA, an Italian commercial lottery operator.
Polcard only handles transactions within Poland now. Being part of First Data would help it move into other countries in its region, Ms. Patsley said.
Her division, which is based in Denver, will continue to expand in Europe, she said. "We are picking our markets and approaching opportunities based on the size and the opportunity for growth, margins, and profitability."
She said the plan is to integrate Polcard onto First Data International's processing platforms, but she declined to say when that might happen.
Gregory Smith, an analyst with Merrill Lynch, wrote in a note published Friday, "We view this acquisition very favorably for FDC since it instantly gives the company a significant presence in a key emerging market and enhances the company's overall market position in Central and Eastern Europe."
He wrote, "We continue to believe that FDC's growing international presence is underappreciated by investors."
The Polcard deal is expected to close in the second quarter.
