Source: Global Payments
Global Payments Inc. (NYSE:GPN) , a leader in payment processing services, announced today it has completed the formation of a joint venture with The Hongkong and Shanghai Banking Corporation Limited to provide payment processing services to merchants in the Asia-Pacific region.
The joint venture, Global Payments Asia-Pacific Limited, will provide merchant acquiring services to over 45,000 merchant outlets across ten countries and territories: Brunei, Hong Kong, India, Macau, mainland China, Malaysia, Maldives, Singapore, Sri Lanka and Taiwan.
"We are honored to have been chosen by HSBC for this important joint venture. Having the ideal partner for payment card processing makes our prospects for success in this dynamic and growing region even more compelling," said Chairman, President and Chief Executive Officer of Global Payments, Paul R. Garcia.
"This joint venture will strengthen our capabilities in the merchant acquiring business as Global Payments Asia-Pacific will benefit from HSBC's large and extensive footprint in the region as well as Global Payments Inc.'s technological expertise. I am personally pleased to lead this exciting and innovative venture in the rapidly-expanding Asia-Pacific payments market," added Ian Courtnage, Managing Director of Global Payments Asia-Pacific Limited.
Under the terms of the agreement announced in September 2005, Global Payments paid HSBC US$67.2 million in cash to acquire a 56 percent ownership interest in the joint venture. HSBC controls the remaining 44 percent and contributed its existing Asia-Pacific merchant acquiring channel in ten countries and territories 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, in the ten Asia-Pacific countries and territories, to the joint venture for merchant payment processing.
Global Payments expects this transaction will be non-dilutive to earnings per share. Over the long term, the company anticipates strong revenue growth and earnings accretion from this transaction, as the joint venture endeavors to further penetrate mainland China, India and the other joint venture regions, in addition to maximizing operating efficiencies. The company will further discuss this transaction and the related financial impact during its fourth quarter and year end fiscal 2006 earnings conference call on July 28, 2006.