Fiserv to buy chunk of US Bancorp's Elan unit

Source: Fiserv

Fiserv, Inc. (NASDAQ: FISV), a leading global provider of financial services technology solutions, announced today it has agreed to acquire the debit card processing, ATM Managed Services and MoneyPass® surcharge free network of Elan Financial Services, a unit of U.S. Bancorp (NYSE: USB).

The acquisition will further enhance the value proposition of Fiserv, deepen its presence in debit card processing, and expand its mobile and digital payments offerings for consumers and businesses.

Through this transaction, Fiserv will build on the growth of its Card Services business by expanding its suite of solutions in key areas such as ATM Managed Services. The company will also add MoneyPass®, the second largest surcharge-free network in the United States with access to more than 33,000 ATMs nationwide, to further enhance its market position. Fiserv will offer Elan clients additional services, including risk management solutions, Accel® debit payments network and enhanced debit platform capabilities. This acquisition does not include the Elan credit card issuing and corporate payments businesses, which are also U.S. Bancorp units. The transaction, which is subject to regulatory approval and other customary closing conditions, is anticipated to close in the fourth quarter.

“We continue to see opportunities for financial institutions to enhance the card-based payments they provide to their customers in an always-on, anytime access world,” said Jeffery Yabuki, President and Chief Executive Officer, Fiserv. “This acquisition expands our capabilities and provides additional expertise, which together should enhance the value we provide our clients. We look forward to welcoming the Elan team to Fiserv.”

After an evaluation of this business unit, U.S. Bancorp made the strategic decision to sell the business. “We believe this sale is the right thing to do for the bank and our customers,” said Tim Welsh, vice chairman, Consumer Banking Sales and Support, U.S. Bank. “Our customers will now benefit from the long-term commitment Fiserv has for this business and its clients and U.S. Bank will benefit as we continue to reinvest in our core businesses.”

At closing, Fiserv will pay a purchase price of approximately $690 million. The acquired business has revenue of more than $170 million and Fiserv anticipates this transaction to be accretive to adjusted earnings per share in 2019. Fiserv will provide additional financial detail surrounding this transaction on its third quarter 2018 earnings call.

Fiserv partners with financial institutions, independent sales organizations and retailers to provide a comprehensive suite of Electronic Funds Transfer (EFT) services, including credit and debit card processing, ATM management services, fraud mitigation and risk management solutions, and the Accel® debit payments network. 

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