Visa Inc. (V) has agreed to pay $2 billion for CyberSource Corp.
(CYBS), a provider of electronic-payment security services to
online merchants.
Visa will pay $26 a share using cash on hand, a 34% premium to
CyberSource's closing price Tuesday. CyberSource's price was last
at that level a decade ago, when the stock traded above $65 at the
height of the Internet bubble.
"Online commerce continues to grow rapidly, and this acquisition
will enable Visa to offer new and enhanced services that will
better meet the growing demand among merchants globally for robust,
secure online payment processing capabilities which in turn will
grow the entire eCommerce category," said Visa Chairman and Chief
Executive Joseph W. Saunders.
Visa said it expects the deal to dilute its fiscal
fourth-quarter earnings by 4 cents to 5 cents a share because of
one-time transaction costs. It expects the deal to be "slightly
dilutive" to the coming year's profit.
The deal, which requires CyberSource stockholder approval, is
expected to close during Visa's fiscal fourth quarter, which ends
in September.
CyberSource President and CEO Michael Walsh will continue to
oversee CyberSource operations. Founder and Chairman William
McKiernan will join Visa as an adviser to assist in integrating the
two companies.
-By Kevin Kingsbury and Nathan Becker; Dow Jones Newswires;
212-416-2354; kevin.kingsbury@dowjones.com