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Concord EFS to acquire Card Payment Systems
MEMPHIS, Tenn. -- Concord EFS, Inc. announced an agreement to acquire Card Payment Systems, a New York-based reseller of payment processing services. Formed in 1996, CPS specializes in providing card-based payment ISOs, which in turn sell those services to retailers. The acquisition is expected to be completed in the first quarter of 2000, subject to regulatory approval and other closing conditions, and will be accounted for as a pooling of interest transaction. Concord will issue 6.2 million shares of its common stock to acquire CPS, which is expected to add approximately $84 million in revenues and $15 million in pre-tax net income in 2000. "This is a great transaction for Concord, both because it's accretive to earnings per share and because it creates a new distribution channel for our vertically-integrated payment product," said Edward A. Labry III, Concord president. "We'll be able to deliver a turn-key package that is unique in the ISO market, including equipment, terminal leasing, credit, debit, and EBT acceptance, sponsorship into credit card associations and debit networks, signature capture, check conversion, and back-end settlement," he added. CPS currently services approximately 23,000 merchant accounts, adding over 2,000 new accounts per month and processing in excess of $1.8 billion in acquiring volume annually. They provide credit card, debit card, EBT and e-commerce payment solutions to a merchant base consisting of retailers, mail-order firms, and Internet-based businesses. Privately owned and headquartered in New York City, CPS has a sales force of over 250 people. "There's a lot of fragmentation in the ISO market today, and I believe it's ready for a processor like Concord that can offer a complete range of processing services for ISOs of all sizes," said Laurence Stone, CPS president.
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