Source: NOVA Information Systems
NOVA Information Systems (NOVA), a wholly owned subsidiary of U.S. Bancorp (NYSE:USB), today announced that it has entered into a definitive agreement to acquire the merchant processing business of First Horizon Merchant Services Inc. (FHMS), a wholly owned subsidiary of First Tennessee Bank and a part of First Horizon National Corp. (NYSE: FHN).
This acquisition involves approximately 53,000 merchant locations in the United States, Canada and Puerto Rico, 400 employees, and FHMS systems, sales and operations centers based in Englewood, Colo., and Orlando, Fla.
FHMS is the second largest acquirer of hospitality transactions in the United States, and its portfolio also includes retail, restaurant, healthcare and automotive businesses. New merchant services will be marketed through a direct sales force and through a strategic alliance referral relationship with First Horizon National Corporation's 208 banks located in Tennessee, Mississippi, Virginia, Georgia and Texas. The credit and debit card processing volume from this agreement is expected to add approximately $25 billion annually to NOVA's processing business. Under the terms of the agreement, the transaction carries an initial purchase price of approximately $433 million, with the potential for a subsequent payment based on performance-related criteria.
"First Horizon is a well-established and highly recognized market leader with a history of strong performance and solid growth," said Pamela A. Joseph, chief executive officer, NOVA Information Systems. "Their impressive national merchant base, specialized product portfolio, network infrastructure and experienced staff complement our existing business and expand our reach into the travel and entertainment sector. We are honored that they have selected NOVA as a trustworthy partner to serve their clients' needs."
"Historically it has been important for us to be a processing solution company, one that creates value at every constituency level with unique internally controlled products," said Ronald R. Nation, president of First Horizon Merchant Services. "With the existing global processing attributes of NOVA, we can now provide uniform solutions to our global clients. More importantly, no other Visa or MasterCard licensee that I know of can do what we now can do around the world exclusive of reliance on third-party service bureaus."
The deal is expected to close in the first quarter of 2006.