BofA to Buy National Processing
Bank of America Corp. said Tuesday it agreed to buy bank card transactions processor National Processing Inc. for $1.4 billion in cash, a combination that would create the nation’s second-largest such company with nearly $250 billion in annual transaction volume.
Charlotte-based Bank of America said it would merge its merchant-services unit into National Processing. The combined business would be based in Louisville, Ky., where National Processing is located.
National Processing’s merchant-services business processes Visa and MasterCard transactions for about 700,000 merchants in North America. The company also provides financial settlement and reporting services to large and mid-size corporate customers in the travel and healthcare industries.
“This transaction will allow Bank of America to compete more effectively in the electronic-payments business by creating immediate scale through National Processing’s customer base and by using that company’s technology platform to drive growth and improve servicing capabilities” for clients, said G. Patrick Phillips, president of card services and electronic commerce at Bank of America.
Bank of America spokeswoman Eloise Hale said it was too early to tell whether the deal would result in any layoffs. But she added, “There is very little overlap in the businesses, the customers and the operations.”
National Processing now has about 1,600 employees, of which 1,350 are located in Louisville.
Bank of America said it would pay $26.60 a share for National Processing -- about 10% less than the company’s market price in recent days.
The stock has jumped from about $18 in April on reports that Cleveland-based bank National City Corp., which owns 83% of National Processing, was mulling over what to do with its stake in the firm.
Bank of America indicated that the deal terms had National City’s support.
On the New York Stock Exchange, National Processing shares fell $3.15 to $26.25, Bank of America rose 28 cents to $85.13, and National City slipped 12 cents to $34.77.
