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8-K - FORM 8-K - TOTAL SYSTEM SERVICES INC | g22319e8vk.htm |
Exhibit 99.1

PRESS RELEASE
Total System Services, Inc.
One TSYS Way
Post Office Box 2567
Columbus GA 31902-2567
+1.706.649.2307 / +1.706.649.5740
www.tsys.com
One TSYS Way
Post Office Box 2567
Columbus GA 31902-2567
+1.706.649.2307 / +1.706.649.5740
www.tsys.com
For immediate release:
Contacts:
Cyle Mims
|
Shawn Roberts | Kevin Langin | ||
TSYS Media Relations
|
TSYS Investor Relations | Director of Public Relations | ||
+1.706.644.3110
|
+1.706.644.6081 | +1.402.602.3541 | ||
cylemims@tsys.com
|
shawnroberts@tsys.com | klangin@fnni.com |
TSYS Forms Merchant Acquiring Joint Venture
With First National Bank of Omaha
With First National Bank of Omaha
Columbus, Ga. and Omaha, Neb., March 1, 2010 TSYS (NYSE: TSS) announced today the signing of a
joint venture agreement with First National Bank of Omaha (FNBO) to form a new company, First
National Merchant Solutions, LLC (FNMS). This gives TSYS a top-10 presence in the merchant
acquiring market in the United States*.
FNMS offers transaction processing, merchant support and underwriting, and business and
value-added services, as well as Visa®- and MasterCard®-branded prepaid cards
for businesses of any size. Ranked as the 10th-largest merchant acquirer in North America by dollar
volume, FNMS has a 57-year history in the acquiring industry with more than 300,000 merchant
outlets in its diverse portfolio.
After years of providing acquiring solutions to our clients, this joint venture positions
TSYS as a full-service merchant acquirer for the first time in our companys history, said Philip
W. Tomlinson, chairman of the board and chief executive officer of TSYS. We felt that FNMS
presented the right opportunity for TSYS to broaden its participation in the payments industry.
This joint venture gives FNMS increased opportunities to compete in a rapidly-changing
industry, said Daniel ONeill, president of FNBO. Partnering with TSYS allows us to gain
technology and tools that will permit us to accelerate growth and enhance our capabilities to serve
our growing customer base.
ONeill said that the agreement affirms FNMS commitment to Omaha. Diana Mehochko will remain
as president of the new company and her executive management team will continue in their existing
capacity.
Strategically, we knew that FNMS offered a unique opportunity to attract the right partner
who brought the significant investment required to take this important, national business to the
next level, he said. The partnership is committed to best-in-class technology, product offerings
and service to customers.
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* The Nilson Report March 2009
Under terms of the agreement, TSYS will acquire 51 percent ownership of FNMS for approximately
$150.5 million, while FNBO will control the remaining 49 percent. FNMS had net revenue of $93
million in 2009. The transaction is expected to close April 1, 2010.
TSYS expects the transaction to be accretive to diluted earnings per share in the first full
calendar year of operation. TSYS management will discuss the acquisition in their 1Q Earnings
Conference Call on April 20, 2010. Please refer to the attached Fact Sheet for further details
about both companies and the joint venture terms. TSYS has posted a slide presentation relating to
this transaction in the Investor Relations section of its Web site at www.tsys.com, under Investor
Relations then Webcasts and Presentations.
About TSYS
TSYS (NYSE: TSS) is one of the worlds largest companies for outsourced payment services,
offering a broad range of issuer- and acquirer-processing technologies that support
consumer-finance, credit, debit, healthcare, loyalty and prepaid services for financial
institutions and retail companies in the Americas, EMEA and Asia-Pacific regions. For more
information contact news@tsys.com or log on to www.tsys.com. TSYS routinely posts all important
information on its website.
About First National Bank of Omaha
First National Bank of Omaha is a subsidiary of First National of Nebraska. First National of
Nebraska has grown into the largest private banking company in the United States. First National
and its affiliates have more than $17 billion in managed assets and nearly 5,700 employees located in 35
states. Primary banking offices are located in Nebraska, Colorado, Illinois, Iowa, Kansas, South
Dakota and Texas.
First National Merchant Solutions has been a subsidiary of FNBO and provides complete payment
processing and first-rate services and customized solutions to businesses of all sizes across the
nation. For more information, visit www.fnms.com.
Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the
meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 as amended by the
Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among
others, statements about the benefits of the acquisition, including the expected accretive impact
on earnings, and the expected timing for closing the acquisition. These statements are based on the
current beliefs and expectations of TSYS management and are subject to known and unknown risks and
uncertainties. Actual results may differ materially from those contemplated by the forward-looking
statements. A number of important factors could cause actual results to differ materially from those contemplated by our
forward-looking statements, including, but not limited to: (i) the expected synergies from
acquisition may not be realized or may not be realized within the expected time period; (ii) the
acquisition may disrupt TSYS
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current business operations and TSYS may not be able to successfully manage growth; (iii) TSYS may
not be able to retain key personnel; (iv) customers may not react favorably to the acquisition; and
(v) the expected closing date of the acquisition may be delayed and the acquisition may not close.
For further information regarding the risks associated with TSYS business, please refer to TSYS
filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We believe these forward-looking
statements are reasonable; however, undue reliance should not be placed on any forward-looking
statements, which are based on current expectations. We do not assume any obligation to update any
forward-looking statements as a result of new information, future developments or otherwise.
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Fact Sheet
TSYS Forms Merchant Acquiring Joint Venture
With First National Bank of Omaha
With First National Bank of Omaha
Transaction Summary
TSYS will form a merchant acquiring joint venture with First National Bank of Omaha (FNBO)
through the creation of a new company, First National Merchant Solutions, LLC (FNMS). TSYS will pay
$150.5 million in cash for a 51 percent majority ownership in FNMS, with FNBO controlling the
remaining 49 percent. The company will retain its brand and operate independently with Diana
Mehochko as president, reporting to a Board of Directors comprised of three TSYS executives and two
FNBO executives. TSYS expects the transaction to be accretive to diluted earnings per share (EPS)
in the first full calendar year of operation. FNMS will have a long-term marketing alliance and
bank sponsorship agreement with FNBO, which will provide sales and business referrals to the
company. The transaction is expected to close April 1, 2010.
FNBO Strategic Rationale
The joint venture agreement provides increased scale, with significant opportunities for
expanded growth, while providing clients with access to market-leading capabilities across two
outstanding companies. This transaction combines compatible corporate cultures with a world-class
management team that is committed to developing new value creation opportunities and synergy that
were unavailable prior to the joint venture. The partnership will position FNMS to deliver the key
components for ensuring success for both FNBO and TSYS in the merchant acquiring and processing
industry.
TSYS Strategic Rationale
A strategic objective for TSYS has been to advance further along the payments value chain from
its previous position as only a core processor to one that moves closer to the merchant and the end
consumer. The joint venture gives TSYS a top-10 presence in the U.S. merchant acquiring space
through a well-established company with an experienced management team. Additionally, TSYS can
leverage the FNMS sales and distribution channels to market TSYS products and services.
FNMS At a Glance
FNMS had approximately $74 billion in sales volume in 2009, serving 302,000 merchant outlets.
This represents about 56,000 merchants and 246,000 processed and settled merchants. With a 57-year
history, FNMS provides complete payment processing and fully customizable Visa- and
MasterCard-branded prepaid products for businesses of any size. In 2009, its net revenue
was $93 million. The company has 475 employees and will remain headquartered in Omaha, Nebraska.
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Competitive Advantages
FNBOs management team and employee base have deep industry experience focused on delivering
superior customer service and developing long-term relationships. FNMS also has a multi-channel
sales strategy that drives a highly diversified merchant base across the United States. The new
company will leverage TSYS scale, capital, state-of-the-art technology, payments expertise and
product innovation.
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