Visa Inc. has agreed to pay $2 billion for CyberSource Corp., a provider of electronic-payment security services to online merchants.
Visa will pay $26 a share using cash on hand, a 34% premium to CyberSource's closing price Tuesday. CyberSource's price was last at that level a decade ago, when the stock traded above $65 at the height of the Internet bubble.
"Online commerce continues to grow rapidly, and this acquisition will enable Visa to offer new and enhanced services that will better meet the growing demand among merchants globally for robust, secure online payment processing capabilities which in turn will grow the entire eCommerce category," said Visa Chairman and Chief Executive Joseph W. Saunders.
Visa said it expects the deal to dilute its fiscal fourth-quarter earnings by 4 cents to 5 cents a share because of one-time transaction costs. It expects the deal to be "slightly dilutive" to the coming year's profit.
The deal, which requires CyberSource stockholder approval, is expected to close during Visa's fiscal fourth quarter, which ends in September.
CyberSource President and CEO Michael Walsh will continue to oversee CyberSource operations. Founder and Chairman William McKiernan will join Visa as an adviser to assist in integrating the two companies.