any ideas on what this means for CKFR:
Press Release Source: Bank of America
Bank of America to Acquire National Processing, Inc.
Tuesday July 13, 8:02 am ET
Industry ranking increases to #2 bankcard merchant acquirer
CHARLOTTE, N.C., July 13 /PRNewswire-FirstCall/ -- Bank of America today announced a definitive agreement to purchase all of the outstanding shares of National Processing, Inc. for $1.4 billion in cash, or $26.60 per share.
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The combination with Bank of America Merchant Services would create the nation's second largest bankcard merchant acquirer with nearly $250 billion in annual processing volume.
National Processing, a public company, is 83 percent owned by National City Corporation. The newly combined Bank of America Merchant Services will be headquartered in Louisville, KY, where National Processing is currently based.
"Bank of America is the number one check processor in the U.S.," said G. Patrick Phillips, president, Card Services & e-Commerce, Bank of America. "This acquisition will better position the combined units to deliver a broader suite of payment solutions as transactions migrate from cash and checks to electronic payments."
Phillips noted that Bank of America is the number one debit card issuer and number four credit card issuer in the United States, uniquely positioning the company to innovate and create efficiencies in electronic payments.
Through its Merchant Card Services unit, National Processing provides services to approximately 700,000 merchant locations across North America, representing nearly one out of every six VISA® and MasterCard® transactions processed nationally. National Processing also provides financial settlement and reporting solutions to large and mid-size corporate customers in the travel and healthcare industries.
"Bank of America is committed to a seamless transition for National Processing clients," said Phillips. "Our focus is to expand this business and offer these clients even greater value through the broad range of capabilities we have. Bank of America merchant clients will also benefit."
"This transaction will allow Bank of America to compete more effectively in the electronic payments business by creating immediate scale through National Processing's customer base and by using that company's technology platform to drive growth and improve servicing capabilities for both national and regional merchant clients," he explained.
National Processing has a seasoned, talented team that will blend well with Bank of America's merchant services group, Phillips said.
Bank of America also announced that Mark Pyke, currently the Chief Operating Officer of National Processing, Inc., will lead the combined merchant services business once the transaction is complete. Pyke will report directly to Pat Phillips.
Jon L. Gorney, National Processing chairman and chief executive officer, said the sale resulted from a review of various strategic alternatives undertaken by the company's Board of Directors and is supported by the company's majority owner, National City Corporation. "We believe that the sale agreement with Bank of America is in the best interests of the company and its shareholders," Gorney said.
Gorney noted that National City is focusing on strategic growth in its core banking business, including expansion in the Chicago region and acquisitions in St. Louis, Cincinnati and northern Ohio.
The merger is subject to the approval of National Processing, Inc. shareholders, regulatory approvals and other customary conditions, and is expected to close in the fourth quarter of 2004.
Morgan Stanley acted as financial advisor to National Processing, Inc. in the transaction and provided a fairness opinion. |
