OVA and PMT Services Agree to Merge in $1.3 Billion Transaction
Combination Creates the Leading Provider of Transaction Processing Services to Small and
Medium-Sized Merchants
ATLANTA--(BUSINESS WIRE)--June 18, 1998--NOVA Corporation (Georgia) (NYSE: NIS - news) and PMT
Services, Inc. (Nasdaq/NM: PMTS - news) today announced the execution of an Agreement and Plan of Merger for a
tax-free pooling of interests transaction valued at approximately $1.3 billion, based on the closing price of NOVA's
shares on Wednesday, June 17, 1998.
The merger will create the country's 4th largest provider of merchant bankcard processing services with a combined
portfolio of approximately 350,000 accounts currently producing annualized charge volume of more than $40 billion. In
addition, the combined company will become the new market leader in providing payment processing services to small
to medium sized merchants.
Under the terms of the agreement, shareholders of PMT common stock will receive 0.715 shares of NOVA common
stock for each share of PMT common stock, and PMT will become a wholly owned subsidiary of NOVA. Richardson
M. Roberts, Chairman and Chief Executive Officer of PMT Services, Inc., will remain CEO of PMT. Mr. Roberts, and
Gregory S. Daily, President of PMT, will also serve as Vice Chairmen of the NOVA Corporation Board of Directors.
Edward Grzedzinski, Chairman, President and Chief Executive Officer of NOVA Corporation, remarked, ''We are
very pleased to be announcing the merger of the two fastest-growing companies in the electronic transaction processing
industry. While we both focus on the small merchant market, PMT and NOVA bring different, but very complementary
strengths to the merger. For instance, PMT has increased its merchant portfolio through the acquisition of independent
service organizations and the development of a substantial direct sales force, which currently produces approximately
4,000 new merchant accounts per month.''
''In contrast, much of NOVA's growth has come from the purchase of bank originated merchant portfolios and the
development of ongoing marketing alliances with those banks. As a result, a substantial portion of our internal account
growth is generated by more than 6,600 commercial bank branch offices throughout the country for whom NOVA is
the exclusive provider of transaction processing services. These branch offices also currently produce approximately
4,000 new accounts per month.''
''Clearly, the combined companies will have broader capabilities and more resources. In addition to strong internal
account growth, we have a proven record of successfully purchasing merchant portfolios and acquiring independent
service organizations. Our combined M&A expertise includes more than 130 transactions in the last 6 years. We are
confident we can leverage these capabilities - and our favorable financial position - to aggressively pursue additional
M&A opportunities in our markets. These markets, while highly fragmented, are experiencing increasing consolidation
pressure because of the economies of scale benefitting the larger providers.''
Richardson M. Roberts, Chairman and Chief Executive Officer of PMT Services, Inc., added, ''We are equally
enthusiastic about the market presence NOVA will enjoy after the consummation of this transaction. We believe one of
the principal drivers of shareholder value in the coming years will be the substantial economies the merger should allow.
One of the most important of these economies that we would expect to see would be by leveraging NOVA's
proprietary telecommunications network - the NOVA Network - through the processing volume PMT's portfolio
produces. PMT's front end network is now supplied by a variety of independent vendors. Although we have
consistently reduced our network costs as our transaction volume has increased, the relatively low cost of processing
our accounts over the NOVA Network should represent a substantial cost-savings opportunity.''
''We also believe that the combined companies will produce other economies over time. There are a number of
functions we would expect to consolidate as we combine the strengths of the companies and generate additional
savings. For example, by migrating PMT's account portfolio to the NOVA Network, we expect to achieve a major
reduction in the size and complexity of our service organization, while providing a more streamlined level of service to
our customers.''
Edward Grzedzinski, Chairman, President and Chief Executive Officer of NOVA Corporation and NOVA Information
Systems, Inc., its wholly owned subsidiary, will continue to serve in those positions after the merger is completed.
NOVA and PMT have granted each other stock options to purchase up to 19.9% of each company's outstanding
shares of common stock. The transaction is expected to be completed in late September or early October 1998 and is
subject to customary conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Act and
approval of the shareholders of both NOVA and PMT.
NOVA Corporation, headquartered in Atlanta, Georgia, is a provider of integrated transaction processing services,
related software application products, and value-added services primarily to small to medium sized merchants. The
Company believes that, after giving pro forma effect to transactions completed during 1997 and in January 1998, it was
the nation's fifth largest bankcard processor at December 31, 1997.
PMT Services, Inc. is an independent service organization which markets and services electronic credit card
authorization and payment systems to small retail and professional businesses located throughout the United States.
PMT's merchant portfolio has grown through the internal development of accounts using telemarketing and a field sales
force, as well as through the purchase of merchant portfolios and acquisitions of operating businesses. PMT is one of
the largest independent service organizations in the country.
Statements made in this press release that state NOVA's and PMT's, or their management's, intentions, hopes, beliefs,
expectations or predictions of the future include ''forward-looking statements'' within the meaning of Section 21E of the
Securities and Exchange Act of 1934, as amended. It is important to note that actual results could differ materially from
those projected in such forward-looking statements. Additional information concerning factors that could cause actual
results to differ materially from those projected in such forward-looking statements is contained from time to time in the
companies' quarterly and annual reports filed with the Securities and Exchange Commission.
Contact:
PMT Services, Inc., Nashville
Clay Whitson, 615/743-3800 ext.3200
Scott Brittain, 615/254-3376
or
NOVA Corporation, Atlanta
James M. Bahin, 770/396-1456
Margaret Murphy, 770/698-1044 |
