8-KOther Events

GLOBAL PAYMENTS INC 8-K Report (Jun 27, 2001)

Filed June 27, 2001For Securities:GPN

Summary

GLOBAL PAYMENTS INC. (GPN) announced on June 26, 2001, a significant strategic move to acquire the Merchant Services business of the National Bank of Canada. This acquisition, valued at approximately $47 million USD, is expected to be financed through GPN's existing line of credit, supplemented by a new $25 million revolving credit facility. The deal also includes a ten-year marketing alliance to offer payment processing solutions to National Bank's extensive customer base. This transaction positions Global Payments as the largest independent MasterCard and Visa acquirer in Canada, significantly expanding its market presence and distribution channels. The acquisition is anticipated to close within 60 days, pending Canadian regulatory approvals. The company projects this move will enhance its ability to provide comprehensive payment processing services to Canadian businesses, including Visa, MasterCard, and debit transactions.

Key Highlights

  • 1Global Payments Inc. agrees to acquire National Bank of Canada's Merchant Services business for approximately $47 million USD.
  • 2A ten-year marketing alliance is established to offer payment-related products and services to National Bank's customers.
  • 3The acquisition is expected to make Global Payments the largest independent MasterCard and Visa acquirer in Canada.
  • 4The deal broadens Global Payments' Canadian presence and distribution channels to over 1,700 bank branches nationwide.
  • 5National Bank of Canada's merchant services business generates approximately $25 million USD in annual revenue.
  • 6The transaction is anticipated to close within 60 days, subject to Canadian regulatory approvals.
  • 7Financing for the acquisition will primarily be from GPN's existing line of credit, with a new $25 million revolving credit facility to support working capital.

Frequently Asked Questions

The acquisition is strategically important as it significantly expands Global Payments' footprint in Canada, making it the largest independent MasterCard and Visa acquirer in the country. The accompanying marketing alliance with National Bank provides immediate access to a large customer base and an established distribution network.

The acquisition of approximately $47 million USD will be financed primarily through Global Payments' existing line of credit. Additionally, the company plans to secure a new $25 million USD revolving credit facility to cover working capital and general corporate purposes.

The company expects to gain a dominant position in the Canadian acquiring market, enhance its product offering to include a full suite of payment processing services (Visa, MasterCard, Debit), and leverage National Bank's extensive branch network to reach more businesses. The acquired business also contributes significant annual revenue.

The transaction is subject to normal Canadian regulatory approvals. As with any forward-looking statement, actual results may differ materially due to various risks and uncertainties, including those related to the implementation of changes, customer acceptance, and market conditions, as outlined in the company's filings.