8-KOther Events

GLOBAL PAYMENTS INC 8-K Report (Jun 4, 2001)

Filed June 4, 2001For Securities:GPN

Summary

Global Payments Inc. announced a significant expansion and extension of its strategic alliance with Comerica Bank, effective June 1, 2001. This development follows Comerica's earlier acquisition of Imperial Bank. Global Payments has acquired Imperial Bank's merchant portfolio for $20.4 million, which was financed through an increase in its existing line of credit from $110 million to $125 million. This acquisition broadens Global Payments' market reach, particularly on the U.S. West Coast, and adds approximately 15,200 new merchant locations across various sectors, including traditional retail, hospitality, technology firms, local governments, and dental practices. The agreement also extends the term of the original Comerica alliance through March 2008, with Global Payments maintaining its 51% interest in the expanded partnership. This move is expected to contribute to Global Payments' revenue growth and market diversification.

Key Highlights

  • 1Global Payments Inc. has expanded its alliance with Comerica Bank by acquiring Imperial Bank's merchant portfolio for $20.4 million.
  • 2The acquisition adds approximately 15,200 new merchant locations, strengthening Global Payments' presence on the U.S. West Coast.
  • 3The term of the original Comerica alliance agreement has been extended through March 2008.
  • 4Global Payments' interest in the expanded alliance remains at 51%.
  • 5The company financed the acquisition by increasing its line of credit from $110 million to $125 million.
  • 6The acquired merchant portfolio primarily serves traditional retail and hospitality, with a notable base in emerging markets like technology, government, and professional services.

Frequently Asked Questions

The primary impact is the expansion of GPN's business through the acquisition of a significant merchant portfolio and the extension of a key strategic alliance with Comerica Bank. This is expected to enhance GPN's market share, revenue, and geographical diversification, particularly on the U.S. West Coast.

The acquisition was financed through Global Payments Inc.'s existing line of credit, which was increased from $110 million to $125 million specifically to accommodate this transaction.

The alliance has been extended through March 2008. Global Payments Inc. retains its majority interest of 51% in this expanded partnership, which now includes the merchant portfolio from Imperial Bank.

The acquired portfolio includes approximately 15,200 merchant locations primarily in the traditional retail and hospitality sectors. It also has a substantial base of emerging market merchants, such as technology firms, local governments, casinos, and small dental practices, indicating a diversified merchant base.