MA MasterCard Incorporated

By Anne Steele 

MasterCard Inc. said it was buying most of VocaLink Holdings Ltd., a bank-owned technology company in the U.K. that provides the backbone for non-card transactions such as employer payroll deposits and consumer bill payments.

The deal, valued at about $920 million, is the latest transaction involving a U.K. company following last month's Brexit vote. Officials of both companies said, however, that the deal wasn't related to the political climate and negotiations had been ongoing for months.

In addition to providing the technology backbone for non-card payments, VocaLink also unites the infrastructure of Britain's automated teller machine network among its participating banks. VocaLink reported $240 million in revenue last year and processed more than 11 billion transactions.

The deal "is an important component of our strategy to actively participate in all types of electronic payments and payment flows," said Martina Hund-Mejean, MasterCard's chief financial officer, in a conference call with analysts to discuss the deal.

VocaLink is involved in payments technology elsewhere in the world as countries upgrade their systems so that money can move instantly between business, consumer and government accounts. The company is also developing an instant mobile-payments system for non-card transactions.

Ms. Hund-Mejean said the deal doesn't change MasterCard's view on its core card-based business, but reflects "an expansion of our capability."

She also said the deal isn't expected to cannibalize MasterCard's card business because consumers and businesses are the ones who ultimately decide what type of payment they want to make.

Executives said the deal is unlikely to be affected by the uncertainty surrounding Brexit.

"We have to support locally every country. It doesn't really matter if you are part of the EU or not part of the EU," said VocaLink Chief Executive David Yates, who will join MasterCard's management committee after the deal is completed.

He said that VocaLink had "outgrown" its shareholder base and needed new ownership in order to expand. Additionally, he said, the company's bank owners were under some regulatory pressure to sell their positions so that the company would have a non-bank owner.

Banks that own VocaLink include Barclays Bank plc, Royal Bank of Scotland Group, Lloyds Banking Group, HSBC and Santander.

Following the deal's completion, MasterCard will own 92.4% of the company. A majority of VocaLink's current owners will retain a 7.6% stake for at least three years. The deal terms also extend the potential that existing shareholders could earn up to an additional $220 million if certain performance targets are met.

MasterCard said the deal would add 5 cents to earnings per share in 2017 and 2018 if it closes as expected early next year.

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. 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."

Anne Steele contributed to this report

Write to Robin Sidel at robin.sidel@wsj.com

(END) Dow Jones Newswires

July 21, 2016 11:55 ET (15:55 GMT)

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