PMT Services Inc. said it has agreed to buy American Heritage Bankcard, one of the largest remaining independent sales organizations in the merchant processing business.

The announcement Tuesday came within days of PMT's closing of acquisitions of two other so-called ISOs.

The deal with Chatsworth, Calif.-based American Heritage is expected to close by yearend; terms were not disclosed.

The two previous purchases were of Bancard Inc., Boulder, Colo., and Retail Systems Consulting Inc., Youngstown, Ohio.

The latest acquisitions highlight PMT Services' efforts to add to its sales force and take on larger merchant portfolios.

The portfolio of American Heritage generates $800 million of annual sales volume. American Heritage also services accounts for 150 banks with a combined transaction volume of $1.8 billion. It has a merchant base of 17,000 and a sales staff of 20.

Nicholas Ferrante, 64, one of the most respected veterans of the merchant processing industry, said he will remain president of American Heritage for a few years.

In striking the deal, he said he was looking at the "long-term viability of the company beyond the lifespan of the owners," and sought to form an alliance to "preserve the company's lifespan."

Mr. Ferrante added he had entertained offers from the five leading merchant-acquirers, but he was intrigued by PMT's capacity to integrate bank portfolios and ISOs.

Bancard Inc., the larger of PMT's other purchases, handles $2.2 billion of annual volume and has 70 salespeople. Retail Systems Consulting's volume is $300 million.

Bancard "provides us with another significant portfolio of size," said Richardson M. Roberts, PMT Services chairman and chief executive officer.

Though PMT usually focuses on smaller accounts-known as "mom and pops"- Mr. Roberts stressed that many of the merchants in the Bancard portfolio are larger than his company previously has acquired. He said many of the merchants in the portfolio are in the travel and entertainment industry.

The acquisitions may also signal that PMT is planning a growth course for fiscal 1998 similar to that of fiscal 1997, which ended July 31. PMT bought 12 portfolios, bolstering its merchant base by 55%, to 140,000.

In April, the company bought the merchant portfolio of Salt Lake City- based Zions First National Bank, with $1 billion in annual charge volume and 4,000 merchants. At that time, industry experts said PMT would use the bank's 145 branches as a sales distribution network.

Mr. Roberts said Bancard in particular "provides us with another strong entrepreneurial sales, marketing, and management team, which will help improve our internal growth."

Bancard also brings to PMT "presence in consumer markets where previously we had no physical, direct field sales force presence," Mr. Roberts said.

The acquired ISOs operate in Colorado, Pennsylvania, and Ohio. American Heritage is concentrated in the West.

Richard K. Weingarten, director at Salomon Brothers Inc., said PMT is "trying to get its internal growth rate higher, and one of the ways to do this is to buy companies that come with sales forces."

Although companies such as Atlanta-based Nova Information Systems are winning "more than its fair share" of bank portfolios, Mr. Weingarten said, "PMT is winning more than its fair share of ISO portfolios."

"What we understood from them is that while the average merchant size is significantly above the norm, the attrition rates and the loss rates (on the Bancard portfolio) are very low," Mr. Weingarten said.

Mr. Roberts would not discuss the number of merchants in each portfolio, but experts estimate the Bancard portfolio is between 10,000 and 15,000 merchants.

"Eight months ago, PMT's stock took a hit," said Marc Abbey, principal at First Annapolis Consulting, Linthicum, Md. "The conventional wisdom was that PMT is not an operating company. Its growth had come from acquisitions rather than organically generated sales opportunities."

Today PMT is "filling gaps in their capabilities through acquisitions," Mr. Abbey said.

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