LAS VEGAS - Global Cash Access (GCA), a supplier of cash access and customer relationship marketing technologies to the gaming industry, on March 10 completed its recapitalization and repurchase of First Data Corp.'s (NYSE:FDC) 67 percent interest in the company's parent holding company, GCA Holdings, L.L.C., for approximately $435 million.
According to a news release, M&C International Inc., GCA's founder, now owns slightly more than 95 percent of GCA's parent holding company; Bank of America Corporation owns the remainder.
"Selling our majority stake in GCA enables us to sharpen our focus on our core competencies and business segment growth," said Charlie Fote, First Data's chairman and chief executive. "At the same time, we can build on our solid six-year relationship with GCA by continuing to offer First Data services through GCA to the gaming industry."
According to the release, GCA will continue to offer First Data products and services to the gaming industry, including Western Union Money Transfers and TeleCheck check guarantee services.
Many industry watchers speculate that First Data will use the infusion of capital to fund acquisitions in overseas markets, such as its recent purchase of Australia's Cashcard.
(See related stories First Data to expand ATM activities in Australia with purchase of Cashcard, Price for Australia's Cashcard said to be $148M and First Data's proposed acquisition of Cashcard gets regulatory go-ahead)
GCA provides cash access products and services to approximately 70 percent of the gaming establishments in the United States, Canada, the Caribbean and the United Kingdom. First Data, Bank of America and M&C International formed GCA in 1998 to provide cash advance and related services to the gaming industry.
GCA's products and services allow gaming patrons to access funds through a variety of methods, including ATM withdrawals, credit card cash advances, point-of-sale, debit card transactions, check cashing transactions and money transfers. GCA also owns Central Credit, a resource for underwriting patron credit decisions, or markers.
Banc of America Securities LLC acted as the exclusive financial adviser to M & C International in connection with the repurchase and recapitalization transactions. Banc of America Securities LLC also acted as sole lead arranger and sole book running manager for GCA's $280 million senior secured credit facility and as sole bookrunning manager for GCA's $235 million senior subordinated notes offering.
From 2000 to 2003, the GCA's revenues grew at a compounded annual growth rate of 13.8 percent, which compared favorably to the estimated 5.6 percent compounded annual growth rate in total U.S. gaming revenues during the period.
