TSYS CASE STUDY
Creating a diversified industry leader
Market leaders constantly take steps to capture and maintain market share in a given vertical. By contrast, industry leaders identify and strategically execute opportunities to successfully grow their footprint across multiple related markets.
Since developing software to support one of the first U.S. bank credit card programs in 1959, Total System Services, Inc. (TSYS) had grown into one of the largest payment solutions providers in the world, supporting financial institutions, businesses and governments in more than 80 countries. An industry leader, TSYS dominated the markets for payment processing and acquiring, having grown organically and through a number of strategic acquisitions over the years.
In 2012, TSYS engaged Houlihan Lokey to advise the company on the acquisition of NetSpend Holdings, Inc., a leading provider of general purpose reloadable (GPR) prepaid debit cards and related financial services to self-banked customers. Furthering TSYS’ strategy of providing People-Centered PaymentsSM, the proposed transformational acquisition would propel TSYS into an extremely high-growth area of payments and expand the company’s customer base beyond banks and merchants into direct to consumers. This complimentary business, building off of TSYS’ strength in credit and debit card processing, would also diversify the company’s revenue stream and accelerate its growth projections.
TSYS’ $1.4 billion acquisition of NetSpend closed in July 2013. Houlihan Lokey served as the exclusive financial advisor to TSYS and assisted with structuring and negotiating the transaction on its behalf. Houlihan Lokey also rendered a fairness opinion to the board of directors of TSYS in connection with the transaction.
We were proud to be a part of this landmark transaction in the financial technology industry and help both of these industry leaders advance their vision.