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Euronet Buys Pure Commerce

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Euronet Worldwide Inc. (EEFT - Free Report) recently announced the purchase of Australia based Pure Commerce.

The deal entails Euronet to have Pure Commerce’s portfolio of services and make them available to the global, local and online merchant acquirers, banks and retailers and helps Euronet to penetrate into more markets. It is expected to increase Euronet’s annual cash earnings per share by 3 cents to 4 cents in 2013. The Zacks Consensus Estimate for full year 2013 is currently pegged at $1.64, reflecting a 17.5% year over year improvement.

Pure Commerce is a provider of an array of services consisting of currency conversion payment and multi-currency acquiring services for point-of-sale terminals, online applications and ATMs in high foreign card volume locations. It mainly caters to leading international banks, acquirers and global merchants worldwide, with more focus in Asia Pacific and Europe.

Similar to Euronet, Pure Commerce is quite popular with consumers as it provides user friendly solutions. Thus being part of the Euronet team, Pure Commerce is expected to enhance the acquirer’s value added payment solutions profile. Euronet expects the acquisition to consolidate its Asia Pacific operations besides offering its customers with better revenue sources through Pure Commerce’s products and services.

There has been no earnings momentum in the last seven days. We expect the estimates to move north over the optimism of the recent acquisition.

In order to expand its operations, Euronet engages in a number of merger and acquisition activities. Recently, Euronet’s ePay division also entered into partnership with Europe’s leading provider of merchant accounts, World Pay to help retailers earn excellent commission rates through improved card payment options.

The company expects adjusted EPS for the fourth quarter of 2012 to be 47 cents, which is above the current Zacks Consensus Estimate of 42 cents and reflects a year-over-year improvement of 42%.  That of full year 2012 is pegged at $1.40, reflecting a 10.0% improvement year-over-year.

Euronet currently holds a Zacks Rank #1 (Strong Buy). Companies like Moneygram International New (MGI - Free Report) and Western Union Co. (WU - Free Report) closely compete with Euronet. Western union carries a Zacks Rank #4 (Sell) while Moneygram carries a Zacks Rank # 3 (Hold).

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