Global Payments (NYSE: GPN), a leading provider of electronic transaction processing solutions, announced today that it has completed the acquisition of ZAO United Card Service ("UCS") in a stock purchase transaction.
Under the terms of the agreement, Global Payments will pay a total of $75 million in cash to acquire UCS.
Global Payments' Chairman and Chief Executive Officer, Paul R. Garcia 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."
With almost 40 years of industry experience, UCS is a leading merchant acquirer in the Russian Federation. In December 2007, UCS entered into a ten-year marketing alliance agreement with Rosbank, a leading financial institution in the Russian Federation. 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. UCS also provides payment processing services to over 70 financial institutions and over 2,500 ATMs.
Based on current Russian Rouble exchange rates, the company anticipates UCS will add approximately $2.5 million in revenues for the month of May 2009 and will be neutral to diluted earnings per share in fiscal years ending May 31, 2009 and 2010.
The shares of UCS that Global 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.