Total System Services closed its $1.4 billion acquisition of NetSpend on July 1, in line with its previously disclosed schedule for closing.
TSYS will pay NetSpend stockholders $16 per share in the all-cash transaction, or nearly $1.16 billion for the nearly 72.45 outstanding shares of NetSpend stock. TSYS will also pay $240.6 million to acquire unvested shares of NetSpend stock.
"You see the large number of underbanked consumers," says Cyle Mims, a TSYS spokesman, who adds in an interview that TSYS's clients have traditionally been banks. "We're missing a large segment, and this allows us to open the door to that segment."
TSYS and NetSpend will spend the next few months developing strategy for the two combined companies, and will likely start rolling out products in about six months, Mims says.
The deal enables TSYS' issuer clients to offer general purpose reloadable cards. NetSpend is now a wholly-owned TSYS subsidiary, and TSYS' fourth operating segment, focusing on direct to consumer products and services. Dan Henry, NetSpend's CEO, and Chuck Harris, its president, will continue to lead NetSpend. The unit will report to Troy Woods, TSYS president and chief operating officer.
"Being able to tap into the strength and resources of TSYS and combine them with the unique product set and fast growing business of NetSpend will enable us to better serve the underbanked market," Henry said in a July 1 release.
NetSpend previously operated as a publicly traded company. NetSpend common stock ceased trading on the Nasdaq exchange prior to the market opening on Monday. The stock will be delisted.
Some shareholders had previously disputed the deal's terms, which delayed a shareholder vote on the transaction's final approval.