DALLAS -- First USA Inc. said it signed a definitive agreement to acquire a Tucson, Ariz., transaction processing firm for about $10.5 million in stock.
The acquisition of MAGroup Inc., which processes for 6,000 merchants, will increase First USA's capacity on the merchant side of its card business, said John C. Tolleson, chairman and chief executive of First USA.
MAGroup "will be an excellent fit for First USA, because it will provide us with new capabilities in the electronic draft capture business," Mr. Tolleson said.
Acquisition to Be Completed in Current Quarter
First USA also said the acquisition will be completed in the current quarter and will contribute to an increase in fiscal 1994 earnings.
MAGroup will retain its name and be operated by First USA Merchant Services Inc., the nation's sixth-largest merchant processor. It handled $10.2 billion in credit card sales during the fiscal year that ended June 30.
The company's card unit, First USA Bank of Wilmington, Del., has issued 4.5 million cards and ranks in the industry's top 20 in outstanding loans.
Pamela H. Patsley, president of First USA Merchant Services, said it intends to retain MAGroup's employees and expand the Tucson operation.
MAGroup's founding executives, led by president and CEO John Hunnicutt, will stay on for a transitional period, Ms. Patsley added.