back to ..006 levels.
(CPM) operations of Travelex for £290 (US $458) million in cash, with an earn-out of up to an additional £35 (US $55) million if certain performance targets are met. The transaction is expected to close in the first half of 2011.
MasterCard is acquiring the Travelex operations that manage and deliver consumer and corporate prepaid travel cards to business partners around the world, including financial institutions, retailers, travel agents and foreign exchange bureaus. These operations also manage cross-border payroll, per-diem and expense-management prepaid cards for corporations. MasterCard has no plans to issue cards directly as a result of this transaction.
As part of the transaction, MasterCard and Travelex signed a long-term contract whereby MasterCard will provide program management services for the Travelex Cash Passport prepaid card sold through Travelex stores and online channels. Travelex, the world’s largest foreign-exchange specialist, pioneered the growing prepaid travel card market with its Cash Passport card, which provides international travellers a more secure and convenient way to carry and spend money abroad.
The deal is an extension of a strong and long-term partnership between MasterCard and Travelex. Last year, the two companies expanded their relationship by agreeing to convert the majority of Travelex card programs to the MasterCard brand and by implementing the global prepaid transaction-processing capabilities of MasterCard Integrated Processing Solutions™ (IPS). MasterCard IPS provides financial institutions world-class debit and prepaid processing solutions that are scalable, reliable, secure and flexible.
“The acquisition of Travelex’s CPM operations underscores MasterCard’s commitment to the global prepaid business, which remains a key strategic focus for us,” said Ajay Banga, MasterCard president and chief executive officer. “This acquisition enables MasterCard to play a greater role in the prepaid value chain, allowing us to shape the future of prepaid, especially in high-growth markets and in the attractive cross-border payments space where we can displace cash and traveler’s cheques.”
Peter Jackson, CEO of Travelex, commented: “The sale of CPM will allow us to accelerate our investment plans, particularly in higher growth regions such as Asia and South America and in the growing e-commerce channel. MasterCard is a great partner of Travelex and we are also pleased to continue to offer our customers the benefits of the Travelex Cash Passport. The sale follows a strong year for the Group in which we have continued to extend our global footprint and deliver a strong performance.”
The acquisition furthers MasterCard’s strategic business goals. Adding Travelex’s CPM operations strengthens MasterCard’s suite of global prepaid business assets allowing the company to focus on countries outside of the U.S. to accelerate prepaid market entry and growth. The transaction is consistent with MasterCard’s commitment to working with partners and issuers around the world to issue MasterCard prepaid cards and deliver the most innovative prepaid card solutions to the marketplace