Global Payments Inc. said Wednesday that its Asia-Pacific joint venture with HSBC Holdings PLC plans to expand into the Philippines by taking over the London banking company's merchant acquiring business in that country.
The Atlanta processor, which owns 56% of the venture, agreed to pay it $11 million in a deal that values the Philippines business at about $20 million. The deal is expected to close in Global Payments' second fiscal quarter, which will end Nov. 30, and to boost the company's earnings slightly within a year.
HSBC would refer merchant customers in the Philippines exclusively to the venture for payment processing services, as it already does in Brunei, Hong Kong, India, Macau, mainland China, Malaysia, Maldives, Singapore, Sri Lanka, and Taiwan.
The venture was started two years ago.
Last month, Global Payments bought a 51% stake in HSBC's U.K. merchant acquiring business — now a joint venture called HSBC Merchant Services — for $439 million.
On a conference call last week, Global Payments' chairman, chief executive, and president, Paul Garcia, said it has a "strong" appetite for acquisitions.
"We have an expectation of announcing some more transactions," he said, "and I think that's probably a near-term expectation. What we're interested in doing is expanding our footprint internationally."
Strong international business helped boost the transaction processor's revenue growth during the fiscal quarter that ended May 31 and helped offset weakness in the United States.