MasterCard to Acquire Big Stake in U.K.'s VocaLink
July 21 2016 - 9:27AM
Dow Jones News
By Anne Steele
MasterCard Inc. on Thursday said it agreed to acquire most of
London-based payment-technology company VocaLink Holdings Ltd. for
about GBP700 million ($920 million), becoming the latest company to
take advantage of the steep fall in the pound after last month's
Brexit vote.
VocaLink operates key payments technology platforms on behalf of
U.K. payment schemes and reported GBP182 million in revenue last
year as it processed more than 11 billion transactions.
MasterCard said the deal enables it to "play a more strategic
role in the U.K. payments ecosystem," which Chief Executive Ajay
Banga called "a very strategic market for us."
MasterCard will take a 92.4% stake in the company and a majority
of VocaLink's shareholders will retain 7.6% ownership for at least
three years. Existing shareholders could earn up to an additional
GBP169 million ($220 million) if performance targets are met.
VocaLink CEO David Yates will join the MasterCard management
committee.
If the deal closes as expected in early 2017, MasterCard
anticipates an additional 5 cents in each of 2017 and 2018 earnings
per share.
Foreign bidders have made a raft of deals since Britain's
referendum to leave the European Union on June 23 as the pound has
dropped about 10% against the dollar in the past month. Perhaps
most notably, U.S.-based cinema operator unit AMC Entertainment
Holdings Inc. agreed to buy Europe's largest cinema chain,
Britain-based Odeon & UCI Cinemas Group. It said the lower
pound was a major factor, and AMC's CEO warned "there may even be a
stampede of U.S. acquirers looking at the United Kingdom."
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
July 21, 2016 09:12 ET (13:12 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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