Credit card juggernaut MasterCard has agreed to acquire DataCash Group in a bid to drive its e-commerce payment expansion in the Asia-Pacific region, Europe and Australia.
U.S.-based MasterCard, which makes money from processing credit and debit card payments on its network, said it would pay 360 pence per share for the British processor of Internet credit-card sales, representing a 54 percent premium to the company’s Wednesday close.
The deal represents approximately £333 million (roughly $520 million), to be paid in cash.
The news has sent shares DataCash flying: they rose more than 50% today so far. DataCash is listed on the London Stock Exchange.
The news comes a couple of months after rival Visa acquired another major e-payment company, Cybersource, for a total consideration of approximately $2 billion in cash.
DataCash offers a single, comprehensive interface that provides e-commerce merchants with the ability to process secure payments across the world. The European payment service provider develops and provides outsourced electronic payments solutions, fraud prevention, alternative payment options, back-office reconciliation and solutions for merchants selling via multiple channels. The company also markets a fraud solutions and technology platform.
In 2009, DataCash says it processed more than 240 million transactions for more than 1,400 merchants in a variety of sectors. Last year, DataCash reported revenue of £36.9 million (US$58 million). The company employs 362 people worldwide with operations in London, Dublin, Mannheim and Cape Town.
Here’s how MasterCard president and CEO Ajay Banga pitched the buy:
“E-commerce represents an important part of MasterCard’s growth strategy, and this acquisition will allow us to provide new services to our acquiring customers, as well as drive increased e-commerce penetration in both existing and new markets.
The acquisition of DataCash will expand our already significant e-commerce merchant gateway presence in Asia and Australia to European countries and other high-growth, emerging markets worldwide.”
MasterCard expects the transaction to be approximately $0.05 dilutive to its fourth quarter 2010 earnings per share.
The transaction, which is subject to customary closing conditions as well as DataCash shareholder approval, is expected to close by the end of October 2010.