STRATEGIC PARTNERS
May 2, 2006
DALLAS - Transaction processor TransFirst has signed a definitive agreement to acquire the third party and agent bank merchant division of Cincinnati-based Fifth Third Bank Processing Solutions.
The acquisition of 77,000 third-party processing contracts will increase TransFirst's current size from $11 billion to $18.5 billion in annual processing volume and will rank the company as the nation's 12th largest processor, according to The Nilson Report's 2002 list of top U.S. bank card acquirers. With this acquisition, TransFirst will service more than 760 agent banks and provide processing for more than 150,000 merchants.
According to a news release, the acquisition is expected to be effective on or about April 1.
In addition to the acquisition agreement, TransFirst and Fifth Third Bank Processing Solutions have entered into a relationship in which Fifth Third will refer certain third-party merchant processing leads (such as agent bank, ISOs and ISCs) to TransFirst.
According to a report in the Cincinnati Business Courier, the contracts all involve third-party merchants with single-store locations.
"We'll continue to process for our multi-chain franchises," said Fifth Third spokeswoman Robbie Jennings in the Courier report. "We're constantly evaluating our business model in an effort to remain as efficient as possible."
Fifth Third Bank Processing Solutions provides ATM services and credit card processing to more than 200,000 financial institutions and retailers nationwide and processes more than 9 billion ATM and point-of-sale transactions per year. After the sale is complete, Fifth Third will count about 150,000 clients.
The contracts being sold are outside of Fifth Third's business footprint, the core of which includes Ohio, Kentucky, Indiana, Illinois and Michigan.
Fifth Third said income from the sale will not be material to operations.
Fifth Third picked up the processing contracts in 2001 when it acquired Universal Companies, a privately held payment and e-commerce processor headquartered in Milwaukee.
