Global Payments Inc. said it will pay about $170 million to acquire a 51percent stake in a new payments processing joint venture with la Caixa, Spain's largest retail bank.
The Atlanta company said Thursday that la Caixa will retain the remaining 49 percent stake and move its existing merchant acquiring operations to the new entity.
"This joint venture clearly fits with our strategic objective of expanding globally and specifically within Western Europe while meeting la Caixa's own growth strategy of expanding its market share," Paul Garcia, Global Payments' chairman and chief executive, said in a press release. Under the deal, which is expected to close by the end of February, la Caixa will refer its merchant customers to the venture for payment processing in Spain and provide card network sponsorship.
The bank services more than 150,000 merchant outlets through its acquiring relationships.
Tien-Tsin Huang, an analyst with J.P. Morgan Securities LLC, called Spain an attractive market for Global Payments in a research note Thursday. He said it is among a handful of developed countries "ripe for bank card growth" based on high per capita gross domestic product and a low payment-penetration rate. The deal should be well received by investors "who have been waiting for an acquisition announcement."