Global Payments (NYSE: GPN), a leading provider of electronic transaction processing solutions, announced today it has completed the formation of a joint venture with HSBC Bank plc ("HSBC") to provide payment processing services to merchants in the United Kingdom and Internet merchants globally.
The joint venture, HSBC Merchant Services, will provide merchant acquiring services to over 135,000 merchant outlets.
"We are honored to have been chosen by HSBC for this important joint venture. The growth prospects in the United Kingdom and throughout Europe are encouraging, and having HSBC as our partner for payment card processing makes the prospects for success even more compelling," said Chairman, President, and Chief Executive Officer of Global Payments, Paul R. Garcia.
"This joint venture will strengthen our abilities as HSBC Merchant Services will continue to benefit from HSBC's large and extensive footprint as well as Global's added expertise in acquiring," said Darren Wilson, Head of HSBC Merchant Services.
Under the terms of the agreement announced earlier this month, Global Payments paid HSBC US$439 million in cash to acquire a 51 percent ownership in the joint venture. HSBC controls the remaining 49 percent and contributed its existing merchant acquiring business in the United Kingdom to the joint venture. In addition, HSBC and Global Payments have entered into a ten-year marketing alliance in which the bank will refer its customers to the joint venture for merchant payment processing services.
For the calendar year 2007, HSBC's merchant acquiring business in the United Kingdom generated revenue of approximately US$229 million (114 million pounds Sterling). Global Payments expects this transaction will be accretive to diluted earnings per share in the first year. The company will further discuss this transaction and the related financial impact during its fourth quarter and year end fiscal 2008 earnings conference call on July 24, 2008.