Visa agrees $2bn CyberSource acquisition

Visa agrees $2bn CyberSource acquisition

Visa has upped its assault on the e-commerce market, agreeing a $2 billion deal to buy online payment and security outfit CyberSource.

The two firms have entered into a definitive agreement that will see Visa pay $26 per share, a 34% premium on Tuesday's closing price of $19.44.

Mountain View, California-based CyberSource serves 295,000 merchants, including British Airways, Home Depot, Facebook, Google and claims to "play a role" in processing a quarter of all e-commerce dollars in the US.

Visa says the acquisition will boost its e-commerce strategy, increasing the use of its cards online and help it offer best-in-class fraud management. The firm also believes CyberSource will help it take advantage of the emerging mobile e-commerce market.

In addition, the acquisition will help Visa market the new Rightcliq online shopping tool that provides users with a centralised location to store and manage their e-commerce activity in a bid to make it easier and safer.

For merchants, the deal will help increase revenue through global growth while minimising monetary loss from fraud and provide them with fast and efficient connectivity to multiple payment networks, says Visa. Meanwhile, for financial institutions acquirers, Visa will deliver added value by providing new business referrals from e-commerce merchants.

Joseph Saunders, chairman and CEO, Visa, says: "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."

CyberSource's president and CEO, Michael Walsh, will continue to oversee the company's operations.

The deal - subject to regulatory and shareholder approval, is expected to close in Visa's fourth fiscal quarter. It will be $0.04 to $0.05 dilutive to Q4 earnings per share on a Gaap basis.

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