ATLANTA - NetBank Inc., has sold NetBank Payment Systems Inc., its ATM and merchant-servicing operation, to PAI ATM Services LLC, a subsidiary of Payment Alliance International Inc. NetBank said several months ago that it planned to sell NPS if the right offer came along. (Read also NetBank shifts strategy.)
"This acquisition marks another important step in the growth and development of our company," said John J. Leehy, III, PAI's chief executive. "The employees at NetBank Payment Systems are highly qualified and have extensive experience in the ATM industry. The group also catered to an attractive base of merchant customers that fits in well with our company's strategic focus and long-term objectives."
The acquisition assets include servicing contracts on more than 8,500 ATMs in the United States.
The sales price totaled $18 million, resulting in initial cash proceeds of $16.5 million.
"We mentioned several months ago our intention to sell this operation as part of our larger corporate reorganization effort," said Steven F. Herbert, NetBank Inc.'s CEO. "We said then that the operation was well managed and had real value. But it simply did not fit in with our core banking and mortgage focus. It required significant capital to operate and therefore represented a strain or distraction on our resources."
PAI will operate NetBank's ATMs under the PAI ATM services name. PAI is expected to re-brand the machines over the next 18 months. However, NetBank said it plans to honor its waiver of surcharges on those machines for its banking customers during the re-branding period.
Herbert called the deal a "win-win."
"PAI is in a position to invest more in the operation and preserve the jobs of the talented team we had in place," he said. "In turn, we have generated significant new tangible capital. This money will prove important in our effort to maintain proper regulatory capital ratios and to protect shareholder value as we fight to get the company back on track financially through further restructuring or other alternatives."
Sam Ditzion, president and chief executive of Boston-based Tremont Capital Group Inc., said the acquisition makes sense for both parties.
"This acquisition is an outstanding addition to PAI's portfolio and will enable the NetBank Payment Systems team to take its business into a new era," he said. "There will be many more mutually beneficial deals like this one as the ATM industry continues to consolidate."
Tremont Capital Group, Inc. introduced the parties and advised PAI in the deal.
