Notable Mergers and Acquisitions of the Day 11/18: AXP, GPN

November 18, 2009 10:18 AM EST

• American Express Company (NYSE: AXP) today announced it has agreed to acquire Revolution Money, a Revolution LLC company.
  
  Revolution Money, launched by AOL Co-founder Steve Case's Revolution LLC in 2007, provides secure payments through an internet based platform. No names or account numbers appear on Revolution cards and transactions are authorized by using a PIN number. The company's online person-to-person payment accounts are FDIC insured and ideally suited for social and instant messaging networks. It also offers a prepaid card linked to those accounts that can be used for offline payments or to withdraw cash from ATMs throughout the United States.
  
  "New payments products and platforms are evolving rapidly and it's important for us to keep identifying cutting edge technologies that can extend our leadership beyond the traditional payments arena," said Kenneth I. Chenault, chairman and chief executive officer of American Express. "While Revolution Money is a young and relatively small company, we believe it has big potential. This is a smart, nimble business. It's run by an accomplished management team who have quickly developed some cutting edge e-payment offerings. Joining with American Express will help unlock their potential, while allowing us to deliver competitive online payment products more rapidly and efficiently."
  
  "Revolution Money has a lot of room to grow as it competes head-to-head with other online and person-to-person payment providers. We are committed to using our global brand recognition, marketing reach and network expertise to help reach a critical mass of customers," said Mr. Chenault.
  
  The transaction, which is subject to regulatory review, is expected to close in the first quarter of 2010. The purchase price is expected to be approximately $300 million. Upon closing, Revolution Money would operate as a subsidiary of American Express and be the first component of its recently formed Enterprise Growth organization. Enterprise Growth was formed to leverage American Express' existing assets and capabilities to generate incremental fee revenue and to drive the company's entry into new payment areas and related businesses.
  
  
• Global Payments Inc. (NYSE: GPN) announced today that it has signed an agreement to sell its DolEx- and Europhil-branded money transfer businesses to an affiliate of Palladium Equity Partners, LLC.
  
  Under the terms of the agreement, Global Payments will receive proceeds in the range of $85 million to $110 million based on the operating performance of the business determined at the time of closing, which is subject to customary regulatory approvals including the consent to the transaction by the issuers of money transfer licenses in many of the states and countries where DolEx or Europhil currently operates.
  
  Global Payments' Chairman and CEO, Paul R. Garcia, said, "This transaction will allow us to focus exclusively on our ongoing strategy of expanding our merchant acquiring presence around the world, and as such, we intend to reinvest the sale proceeds in future merchant acquiring growth opportunities."
  
  The Company plans to report the results of the Money Transfer business as Discontinued Operations. Excluding the Money Transfer segment, the Company's expectations for FY10 revenue growth would increase to 7%-10% or $1.565 - $1.615 billion and FY10 diluted EPS growth increase to 10%-15%, or $2.31-$2.42. The Company plans to share further financial details, including certain non-cash charges related to the divesture on its upcoming fiscal second quarter earnings call scheduled for January 7, 2010.

To see all the Mergers & Acquisitions for today in real-time go to http://www.streetinsider.com/Mergers+and+Acquisitions

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