17 May Metavante and First Data to buy PIN-debit company NYCE
MILWAUKEE – Metavante Corporation and First Data Corporation jointly announced Monday they have signed a definitive agreement that provides for the purchase of substantially all of the stock of NYCE Corporation by Metavante for approximately $610 million in cash. As the majority shareholder of NYCE, Denver-based First Data will receive approximately $389 million and NYCE will become a Metavante subsidiary.
Combined, Metavante and NYCE plan to serve 23 million ATM and debit cardholders. The two companies also expect to process over 235 million monthly electonic funds transfer (EFT) transactions and drive over 20,000 ATMs.
“Building upon our EFT industry experience and knowledge, Metavante has a significant opportunity to augment our electronic funds business by acquiring the nation’s second-largest PIN-debit network in NYCE, which is a capability that we do not have today,” said Frank R. Martire, Metavante president and chief executive officer. “When this acquisition is completed, we expect to have another piece of the payment services solution set at Metavante, which will exchange, route and settle electronic payments on behalf of financial
institutions to and from businesses and consumers. These include our existing electronic presentment and payment services and electronic funds transfer capabilities, as well as the electronic check-image exchange technology we are acquiring in Advanced Financial Solutions Inc.”
First Data has held NYCE as a separate unit since December 2003, pending First Data’s divestiture of its ownership share in NYCE. The liquidation was the result of an agreement between First Data and the Department of Justice surrounding its merger with Concord EFS.
“Electronic payment transactions in the U.S. are on an extraordinary growth curve, and NYCE will help complete single-source payment solutions increasingly requested by our customers,” Martire said. “NYCE will become a Metavante subsidiary, operated as an independent business line under NYCE’s current senior management team. The NYCE brand will remain intact as will its historic commitment to service, reliability and innovation.”
NYCE provides financial institutions, retailers and independent ATM deployers with shared network services for ATMs, online debit point-of-sale and electronic benefits transfer transactions. NYCE’s EFT offers real-time processing services that support ATM management and monitoring services, gateway access and debit card issuance and authorization solutions.
The transaction is subject to regulatory approvals and other customary conditions. In addition, certain minority shareholders of NYCE have the right, within 30 days, to match the terms of the definitive agreement and acquire First Data’s NYCE shares. Metavante expects the transaction to close in the third quarter of 2004, consistent with the timeframes agreed upon with the U.S. Department of Justice.
Milwaukee-based Metavante is the financial technology subsidiary of Marshall & Ilsley Corporation. The company specializes in electronic funds transfer and card solutions.