US-based Global Payments has completed the acquisition of Russia-based merchant acquirer United Card Service in a stock purchase transaction. Under the terms of the agreement, Global Payments will pay a total of $75m in cash to acquire United Card Service.
In December 2007, United Card Service (UCS) entered into a 10-year marketing alliance agreement with Rosbank. Under this agreement, Rosbank provides UCS with Visa and MasterCard bank sponsorship and agent bank processing referrals. In addition, UCS has agent bank processing referral agreements with over 40 other financial institutions in the Russian Federation. It is reported that UCS also provides payment processing services to over 70 financial institutions and over 2,500 ATMs.
According to the aompcny, the shares of UCS that Global Payments purchased are pledged as collateral in connection with a loan agreement entered into by Rosbank in 2004. Rosbank is scheduled to pay off the loan in September 2009, after which the UCS shares will no longer be collateralized. A portion of the purchase price sufficient to cover the remaining payments under the Rosbank loan will be held in cash escrow.
Paul Garcia, chairman and CEO at Global Payments, said: Russia continues to be one of the world’s fastest growing payments markets. UCS provides us with a direct merchant acquiring platform for long-term growth in Russia and a foundation for other direct acquiring opportunities in central and eastern Europe.
Global Payments Inc is a leading provider of electronic transaction processing services for consumers, merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout the United States, Canada, Latin America, Europe, and the Asia-Pacific region. It offers a comprehensive line of processing services for credit and debit cards, business-to-business purchasing cards, gift cards, electronic check conversion and check guarantee, verification and recovery including electronic check services, as well as terminal management.
