News

PULSE, TYME to merge

January 3, 2002

HOUSTON -- The PULSE EFT Association and TYME Corp. have signed a letter of intent to merge Brown Deer, Wis.-based TYME into the PULSE network.

The combined network will establish PULSE as one of the country's largest financial institution-owned networks in the U.S. and creates an electronic funds transfer (EFT) system that will serve more than 3,300 banks, credit unions and savings institutions.

In a joint statement, PULSE President and Chief Executive Officer Stan Paur and TYME President Jim Martin said: "The consolidation of the networks is a natural, because we share a similar ownership structure and the same operating philosophy. In addition, this combination will ensure that a strong industry-owned network will exist that is dedicated to providing the highest quality of switching services at the lowest possible price, regardless of the size or type of institution."

Martin continued, "In today's environment of rapid change and consolidation, particularly in the EFT industry, we felt it was important to our members and to cardholders that TYME be aligned with an organization owned and operated by the financial industry."

Paur noted that TYME, organized in 1975, was the nation's first shared, regional EFT system, and that PULSE, founded in 1981, was patterned after TYME.

"This is a logical combination of two financial industry-controlled associations that embrace similar philosophies regarding quality, governance and strategic objectives," Paur said. "The consolidated organization will leverage our complementary resources not only to deliver EFT services but also to commit resources to value added services such as research, educational programs and lobbying support."

The merger comes at a time when many EFT networks are moving away from a not-for-profit, financial institution ownership model. In perhaps the most prominent example, Memphis, Tenn.-based Concord EFS, owner of the MAC ATM network, entered into an agreement to acquire Star Systems Inc. in October,  just two months after acquiring Chicago-based Cash Station.

The Concord/Star deal will create the country's largest EFT network by far, with a combined total of more than 200,000 ATMs and about 800,000 point of sale (POS) locations.

In contrast, the combined network of PULSE and TYME will include approximately 81,000 ATMs and 457,000 POS locations.

The TYME transaction is the second expansion for PULSE in the past six months. It acquired the Ohio-based Money Station network on Jan. 31.

Three TYME directors will serve on the PULSE board, and Martin is expected to remain as head of Wisconsin operations and be based in Brown Deer.

The closing of the merger is subject to standard conditions, including the completion of due diligence, execution of definitive agreements and approval by TYME shareholders. The companies expect to complete the merger by the end of 2001.

Financial terms of the deal were not disclosed.