Global Payments and 'la Caixa', the Largest Retail Bank in Spain, Form Strategic Joint Venture

Global Payments Inc., a leading, worldwide provider of electronic transaction processing solutions, and "la Caixa," the largest retail bank in Spain, announced today an agreement to form a joint venture to provide merchant acquiring and payment processing services to merchants in Spain.

"la Caixa", headquartered in Barcelona, was founded over a century ago, and is the market leader in Spanish merchant acquiring with over 150,000 merchant outlets. "la Caixa" also has the largest consumer banking footprint in Spain with more than 5,000 branches, 10.5 million customers and a 21 percent market share in merchant acquiring.

"We are thrilled that "la Caixa" has agreed to partner with Global Payments," said Chairman and Chief Executive Officer of Global Payments, Paul R. Garcia. "This joint venture clearly fits with our strategic objective of expanding globally and specifically within Western Europe while meeting "la Caixa"'s own growth strategy of expanding its market share. Based on our singular focus on merchant acquiring, we expect to grow the customer base by providing increased sales resources and focus on the merchant acquiring business," Garcia continued.

Juan Maria Nin, Chief Executive Officer of "la Caixa," added: "By setting up a strategic alliance, "la Caixa" will be joining forces with a world leader in Global Payments, to drive forward market share growth and reinforce the quality of service that it provides to merchants. Furthermore, the deal represents an important step for "la Caixa" in the international growth of its payments systems business. Global Payments is the best partner that "la Caixa" could possibly find for this project, with its 40 years of recognized experience in the merchant services business and a powerful international presence. "la Caixa" and Global Payments share the same attitude towards the importance of new technologies and are committed to capitalizing on the new business opportunities that these generate."

Under the terms of the agreement, and pending regulatory approvals and customary closing conditions, Global Payments will pay euro 125 million in cash to acquire a 51 percent majority ownership in the venture.The company intends to fund the purchase with a combination of existing cash resources in Europe and its credit facilities. "la Caixa" will retain the remaining 49 percent and will contribute its existing merchant acquiring business to the joint venture. In addition, the bank has agreed to a twenty year marketing alliance in which "la Caixa" will refer customers to the joint venture for payment processing services in Spain and provide sponsorship into the card networks. The transaction is expected to close during the company's third fiscal quarter, which ends February 28, 2011.

For the calendar year 2010, "la Caixa'''s merchant acquiring business is expected to generate revenue of over euro 60 million from about 590 million transactions. Global Payments expects the transaction to be modestly dilutive to fiscal 2011 earnings per share on a GAAP basis and modestly accretive on a cash earnings basis, excluding acquisition-related amortization and stock compensation. The company has posted a slide presentation with further details under the Investor Relations section of its Web site at www.globalpaymentsinc.com and plans to provide additional financial details upon the close of the transaction.

Global Payments Inc. (NYSE: GPN) is a leading provider of electronic transaction processing services for merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout the United States, Canada, Europe, and the Asia-Pacific region. Global Payments, a Fortune 1000 company, offers a comprehensive line of processing solutions for credit and debit cards, business-to-business purchasing cards, gift cards, electronic check conversion and check guarantee, verification and recovery including electronic check services, as well as terminal management. Visit www.globalpaymentsinc.com for more information about the company and its services.

"la Caixa," chaired by Isidro Faine and run by Juan Maria Nin, is the largest retail bank and the third financial group in Spain, as well as the leading savings bank in Europe. At third quarter 2010, "la Caixa" had assets worth euro 274.96Bn, 10.5 million customers, a staff of more than 28,014 employees, and the largest sales network in Spain's financial sector, with 5,229 branches and over 7,902 automatic cash points. Ever since its beginnings, the institution has been characterized by its strong social commitment and a desire to work towards favoring the common good, through both its financial activities and its welfare projects. In addition, "la Caixa" controls Criteria CaixaCorp, a financial company which owns the largest portfolio of investees in Spain. Through Criteria, "la Caixa" is present in financial institutions in Europe, Asia, and America, such as BPI Bank, Erste Bank, Boursorama, The Bank of East Asia, and GF Inbursa. As part of its international expansion plan, "la Caixa" has agency offices in London (United Kingdom), Paris (France), Milan (Italy), Stuttgart and Frankfurt (Germany), Istanbul (Turkey), Beijing and Shanghai (China), Delhi (India) and Dubai (UAE). It also has branches in Warsaw (Poland), Bucharest (Romania), and Casablanca (Morocco). Visit www.lacaixa.es for more information.

 

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