On the Wire: TSYS to Acquire NetSpend

Feb. 19, 2013

Press Release

TSYS (NYSE: TSS), a leading global payment solutions provider, and NetSpend (NASDAQ: NTSP), a leading provider of general purpose reloadable (GPR) prepaid debit cards and related financial services to underbanked consumers in the United States, today announced that they have entered into a definitive agreement pursuant to which TSYS will acquire NetSpend in an all cash transaction valued at approximately $1.4 billion. Under terms of the agreement, NetSpend shareholders will receive $16.00 in cash for each share of NetSpend common stock. TSYS expects the transaction to be accretive to GAAP EPS for the first 12 month period following closing, excluding one-time acquisition related fees and expenses.

NetSpend’s extensive distribution network provides consumers the ability to purchase prepaid debit cards at more than 62,000 distributing merchant locations, such as retailers, check cashers, convenience stores, grocers, insurance providers, tax preparers and many others. It is also a leading provider of corporate payroll card solutions, and has a direct distribution channel to reach consumers through online, mobile and direct marketing sources. NetSpend currently serves more than 2.4 million accounts — 46 percent of which are direct deposit accounts — with more than 500 retail distributors and more than 130,000 reload locations.

“The NetSpend acquisition is truly a transformational event for TSYS and consumers alike. It enables us to meet our strategic goals of diversifying our business, being a more innovative payment solutions provider and expanding our role within an area of payments that is expected to grow at a 20% annual rate over the next four years*. The acquisition also complements our already strong presence in the prepaid processing space,” said Philip W. Tomlinson, chairman of the board and chief executive officer, TSYS. “By acquiring NetSpend, we gain a leadership team with deep prepaid experience, a company with scalable technology and a differentiated product offering customized for the partners and channels they serve. NetSpend’s mission is to empower consumers with the convenience, security and freedom to be self-banked, and this promise aligns with TSYS’ people-centered payments approach that is expected to add significant capabilities in terms of future revenue growth for our companies.”

“With the strength and resources of TSYS, our opportunities are endless,” said Dan Henry, chief executive officer of NetSpend, who will join the TSYS executive team. “I can't think of a better, more strongly positioned industry leader who can help us take NetSpend to the next level. We bring a meaningful, fast-growing business to TSYS, and we will be able to offer our unique products and services to the unbanked consumer faster than ever before. We have built such an amazing team here at NetSpend, and we are excited to be the newest addition to TSYS.”

The transaction is expected to close in mid-2013, subject to regulatory approvals, approval by NetSpend shareholders and customary closing conditions.

*Source: First Annapolis Consulting 

Financial and Legal Advisory 

Houlihan Lokey is acting as exclusive financial advisor, and King & Spalding is acting as legal counsel, to TSYS in connection with the transaction. BofA Merrill Lynch is acting as exclusive financial advisor, and Fried Frank is acting as legal counsel, to NetSpend.

Conference Call Details 

TSYS and NetSpend management will discuss the acquisition in a conference call on February 19, 2013, at 6 p.m. eastern. TSYS has posted a slide presentation relating to this transaction in the Investor Relations section of its Website at www.tsys.com, under “Investor Relations” then “Webcasts and Presentations.”

About NetSpend 

NetSpend is a leading provider of general-purpose reloadable prepaid debit cards and related financial services to the estimated 68 million underbanked consumers in the United States who do not have a traditional bank account or who rely on alternative financial services. The Company's mission is to develop products and services that empower underbanked consumers with the convenience, security and freedom to be self-banked. Headquartered in Austin, TX, NetSpend is traded on the NASDAQ stock exchange under the symbol NTSP. Please visit http://www.netspend.com for more information.

About TSYS 

At TSYS, (NYSE: TSS), we believe payments should revolve around people — not the other way around. We call this belief "People-Centered Payments^SM." By putting people at the center of every decision we make, with unmatched customer service and industry insight, TSYS is able to support financial institutions, businesses and governments in more than 80 countries. Offering merchant payment-acceptance solutions as well as services in credit, debit, prepaid, mobile, chip, healthcare and more, we make it possible for those in the global marketplace to conduct safe and secure electronic transactions with trust and convenience.

TSYS’ headquarters are located in Columbus, Georgia, with local offices spread across the Americas, EMEA and Asia-Pacific. TSYS provides services to more than half of the top 20 international banks, is a Fortune 1000 company and was named one of the 2012 World's Most Ethical Companies by Ethisphere magazine. For more information, please visit us at www.tsys.com.

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