“Our financial results for the first six months met our expectations excluding currency translation adjustments and merger and acquisition expenses. The acquisition of NetSpend is a transformational event for us. NetSpend’s revenue has grown at a 22% CAGR over the past five years. The next two years will be very exciting as we work on the integration of NetSpend. We also plan on growing the prepaid program management business and converting the largest pipeline of accounts in our history over the next two years,” said Philip W. Tomlinson, chairman of the board and chief executive officer, TSYS.
“NetSpend is the second largest provider of general purpose reloadable (GPR) and Paycards in the U.S. With the NetSpend acquisition, TSYS gains entry into one of the fastest growing areas of payments which is expected to double over the next 4–5 years. The acquisition complements our already strong presence in the prepaid processing space,” said Tomlinson.
“There are an estimated 68 million U.S. consumers who are underserved. Only 17% of these consumers have ever used a GPR card, and NetSpend serves less than 5% of the overall market today. NetSpend has a leadership team with deep prepaid experience and a differentiated product offering customized for the consumers it serves. The opportunity to capture greater market share is within our reach. NetSpend’s mission is to empower consumers with the convenience, security and freedom to be self-banked, which aligns with TSYS’ brand promise to improve people’s lives and businesses by putting people at the center of payments,” said Tomlinson.
With the acquisition of NetSpend, TSYS is providing guidance on adjusted cash earnings per share and adjusted EBITDA as these metrics will provide a more meaningful measure of the company’s financial performance given the increased borrowing of $1.4 billion and the increase in amortization expense for acquisition intangibles. Beginning in the third quarter, NetSpend will be reported as TSYS’ fourth operating segment.