BROOKFIELD, Wis.—Fiserv has agreed to acquire the debit card processing, ATM Managed Services and MoneyPass surcharge free network of Elan Financial Services, a unit of U.S. Bancorp.
At closing, Fiserv will pay a purchase price of approximately $690 million, the company said. The acquired business has revenue of more than $170 million and Fiserv said it anticipates this transaction to be accretive to adjusted earnings per share in 2019.
Fiserv said the acquisition will further “enhance the company’s value, deepen its presence in debit card processing, and expand its mobile and digital payments offerings for consumers and businesses.”
Through the transaction, Fiserv said it will build on the growth of its Card Services business by expanding its suite of solutions in key areas such as ATM Managed Services. The company said it will also add MoneyPass, the second-largest surcharge-free network in the United States with access to more than 33,000 ATMs nationwide, to further enhance its market position. Fiserv will offer Elan clients additional services, including risk management solutions, Accel debit payments network and enhanced debit platform capabilities, the company said.
What’s Not Included
The acquisition does not include the Elan credit card issuing and corporate payments businesses, which are also U.S. Bancorp units. The transaction, which is subject to regulatory approval and other customary closing conditions, is anticipated to close in the fourth quarter, Fiserv said.
“We continue to see opportunities for financial institutions to enhance the card-based payments they provide to their customers in an always-on, anytime access world,” said Jeffery Yabuki, president and CEO of Fiserv, in a statement. “This acquisition expands our capabilities and provides additional expertise, which together should enhance the value we provide our clients. We look forward to welcoming the Elan team to Fiserv.”
“We believe this sale is the right thing to do for the bank and our customers,” said Tim Welsh, vice chairman, Consumer Banking Sales and Support, U.S. Bank. “Our customers will now benefit from the long-term commitment Fiserv has for this business and its clients and U.S. Bank will benefit as we continue to reinvest in our core businesses.”
Fiserv added that it will provide additional financial detail surrounding this transaction on its third quarter 2018 earnings call.