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MasterCard (MA) Close to Wrapping Up VocaLink Acquisition
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Premier payment solutions company, MasterCard Inc. (MA - Free Report) has reached the last leg in its acquisition of UK based company VocalLink, with regulators giving a nod to the deal. The Competition & Markets Authority of UK passed the deal after being satisfied with the remedial measures taken by MasterCard to address competition concerns.
The regulators were bothered about competition to the LINK ATM network, serviced by VocaLink.
The deal valued at €700 million, will very soon see the light of day. It will be one of the company’s strategic steps to broaden its payments system by providing bank accounted transfers. Shares of the company returned 21.2% since last July when the deal was announced, significantly outperforming the gain of 11.2% logged by the Zacks categorized Financial Transaction Services industry.
VocaLink is a leader in bank account-based payments. Its technology allows bank account transfers in some of the major financial centers across the world which includes UK, Singapore and Thailand. With this acquisition the service will be made available in the U.S too.
With VocaLink, MasterCard seeks to capture more payment flows by adding automated clearing house (ACH) payments to its core card-based business since ACH payments constitute a significant amount of all payments made by companies, businesses and governments.
The deal will provide MasterCard a greater foothold in the U.K. payments industry. The company is keen on making it big in the ACH space since it is at the center of commerce in the U.S., moving money and information from one bank account to another. According to NACHA, The Electronics Payments Association, each year the ACH network moves more than $41 trillion and 24 billion electronic financial transactions. The ACH Network is continuously growing and is now one of the largest, safest and most reliable payment systems in the world, creating value for all participants.
Last month, the company announced another acquisition of NuData Security, a privately held global technology company. This buy will enable MasterCard to provide greater security to online transactions.
These deals will also help the company to source newer avenues of growth in the wake of the recent loss of one of its big client, the USAA, to another player Visa Inc. (V - Free Report) .
The company has been seeking inorganic growth via acquisitions. To this end, it acquired two businesses for $609 million in cash in 2015, and eight businesses for $575 million in 2014.
MasterCard carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the space are Fiserv, Inc. and Total System Services Inc. . Each of these stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fiserv beat estimates in two of the last four reported quarters with an average surprise of 1.2%.
Total System Services beat estimates in three of the last four reported quarters with an average surprise of 3.7%.
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MasterCard (MA) Close to Wrapping Up VocaLink Acquisition
Premier payment solutions company, MasterCard Inc. (MA - Free Report) has reached the last leg in its acquisition of UK based company VocalLink, with regulators giving a nod to the deal. The Competition & Markets Authority of UK passed the deal after being satisfied with the remedial measures taken by MasterCard to address competition concerns.
The regulators were bothered about competition to the LINK ATM network, serviced by VocaLink.
The deal valued at €700 million, will very soon see the light of day. It will be one of the company’s strategic steps to broaden its payments system by providing bank accounted transfers. Shares of the company returned 21.2% since last July when the deal was announced, significantly outperforming the gain of 11.2% logged by the Zacks categorized Financial Transaction Services industry.
VocaLink is a leader in bank account-based payments. Its technology allows bank account transfers in some of the major financial centers across the world which includes UK, Singapore and Thailand. With this acquisition the service will be made available in the U.S too.
With VocaLink, MasterCard seeks to capture more payment flows by adding automated clearing house (ACH) payments to its core card-based business since ACH payments constitute a significant amount of all payments made by companies, businesses and governments.
The deal will provide MasterCard a greater foothold in the U.K. payments industry. The company is keen on making it big in the ACH space since it is at the center of commerce in the U.S., moving money and information from one bank account to another. According to NACHA, The Electronics Payments Association, each year the ACH network moves more than $41 trillion and 24 billion electronic financial transactions. The ACH Network is continuously growing and is now one of the largest, safest and most reliable payment systems in the world, creating value for all participants.
Last month, the company announced another acquisition of NuData Security, a privately held global technology company. This buy will enable MasterCard to provide greater security to online transactions.
These deals will also help the company to source newer avenues of growth in the wake of the recent loss of one of its big client, the USAA, to another player Visa Inc. (V - Free Report) .
The company has been seeking inorganic growth via acquisitions. To this end, it acquired two businesses for $609 million in cash in 2015, and eight businesses for $575 million in 2014.
MasterCard carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the space are Fiserv, Inc. and Total System Services Inc. . Each of these stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fiserv beat estimates in two of the last four reported quarters with an average surprise of 1.2%.
Total System Services beat estimates in three of the last four reported quarters with an average surprise of 3.7%.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>