Nashville-based Verus Financial Management is being acquired by the UK’s Sage Group for $325 million in cash. Verus is a credit card processor that focuses on small and medium-sized businesses. Verus posted 2005 revenues of $64 million compared to $51 million in 2004. Operating profit, before depreciation and amortization was approximately $21 million compared to $7 million in the prior year. At the end of 2005, Verus had gross assets of approximately $25 million. Verus was found in April 2002 by Rich Roberts. Roberts was the previous founder and CEO of PMT Services which was sold to NOVA for $1.3 billion in 1998. Verus acquired Network 1 in July 2002. Sage says Verus will form the core of its North American Merchant Services Division, complementing Sage’s existing North American Payroll Services.
Barclays has launched a new co-branded “US Airways Dividend Miles World MasterCard” offering 15,000 bonus miles upon activation, up to 10,000 bonus miles for balance transfers and the chance to purchase fifty cent tickets to some of US Airways’ more than 200 destinations throughout the month of February. In August US Airways announced plans to switch its co-branded VISA card from Bank of America to Barclay’s Juniper Bank by 2008. After that date Barclays will have the exclusive rights to market the frequent flyer card. The change is the result of Barclays decision to invest $455 million into the merger of US Airways and America West Airlines. The agreement includes a signing bonus of $130 million, as well as a $325 million pre-purchase of air miles. The new “US Airways Dividend Miles World MasterCard” also features a 0% interest rate for the first six months on balance transfers and no annual fee for the first two years. Additionally, cardholders earn 50% more miles during their first year using the card. The card launch coincides with promotions across the country designed to give away over 150 additional free trips during the month of January. Customers who previously used America West credit cards must apply for the new MasterCard. (CF Library 8/10/05)
While many online retail subcategories saw significant growth at the start of the holiday shopping season, a new report has found that jewelry and luxury goods led the list of top gaining categories in November with 39% growth over October. The latest monthly analysis from comScore Media Metrix also found that retailers featuring a presence online and offline reached 62.1 million visitors in November. The category was carried by Wal-Mart.com which received 32.1 million unique visitors in November, up 54% from October. comScore Networks earlier this week said it expects consumer spending at U.S. Internet sites to exceed $19.5 billion for the holiday season, a 24% jump over 2004. Online spending topped $3 billion for the week ending December 11th, the highest for the season. VISA reported that e-commerce spending grew by 33.2% the week of December 5-11, compared to the same period in 2004.
Experian has acquired Los Angeles-based PriceGrabber.com for $485 million plus expenses. PriceGrabber.com will become part of Experian Interactive, which currently includes LowerMyBills.com, MetaReward, Affiliate Fuel, ClassesUSA.com and Experian Consumer Direct. The PriceGrabber.com database contains millions of products in more than 20 categories, such as consumer electronics, clothing, photography, computers, office products, software, toys, home and garden and video games. The company also powers comparison shopping on more than 300 Web sites. This year, PriceGrabber.com estimates sales to be $60 million. PriceGrabber.com was founded in 1999 and employs 140 people.
San Francisco-based Virage has launched “Neurodynamics EPOS Monitoring,” combining digital recording and transmission with advanced real-time monitoring techniques for retailers and consumers. The EPOS Monitoring System has been designed to protect both retailers and consumers from fraudulent activity at the cash register. High quality digital recording combined with synchronous capture of all data from the cash register offers retailers an efficient remote surveillance and retail management system. Virage is a supplier of Rich Media Management technology. Autonomy provides infrastructure software.
About 68% of consumers say they are optimistic about their financial situation in the coming year, including 30% who are “very” optimistic. According to the latest “Experian-Gallup Personal Credit Index” survey, 38% of consumers anticipate paying off all their debt next year. The poll also found that 14% of consumers who have a credit card pay only the minimum amount, in effect using the card as a high-interest loan. In a similar Experian-Gallup poll last December, just 7% of consumers used their credit card that way. Additionally, 36% hope to earn a higher credit score, while just 2% think their score may decline in 2006.
Metris CEO David Wesselink and CFO Bill Houlihan have left Metris Companies today following its merger with HSBC. This past summer the SEC served a “Wells Notice” on Wesselink and controller Mark Wagener. The SEC investigation, first disclosed by Metris in August 2003, concerns the company’s reporting and treatment of allowance for loan losses for 2001 and its valuation of retained interests in securitized loans. HSBC required Metris to resolve the SEC issues. Earlier this week, the Midwest Regional Office of the SEC informed Metris that it does not intend to recommend an enforcement action against Metris. More than 99% of Metris shareholders voted to approve the HSBC acquisition yesterday. The acquisition closed this morning. Metris will become a wholly owned subsidiary of HSBC. Metris and HSBC signed an agreement on August 4th for an all-cash transaction of $1.59 billion. (CF Library 7/13/05; 8/4/05; 11/29/05)
A battle may be brewing over front-of-card personalization services. A U.K. company announced today that it intends to enforce its international intellectual patent rights for the technology that allows cardholders to design their own payment card and enables issuers and manufacturers to use digital card images on the fly for just-in-time card manufacturing. London-based Serverside Group, founded in early 2003, says it has become aware of new front-of-card personalization programs entering the market and may take legal action internationally to protect its patents, copyright, trade secret, trademark and database rights. The company has strategic alliances with VISA, Datacard Group and Getty Images. To-date, SSG has seven issuers offering its card personalization to cardholders including Abbey National, America First Credit Union, Capital One, First National Bank of Omaha and Taishin Bank in Taiwan. The Company says it also has signed contracts with additional top 10 regional issuers and has several other deals in the pipeline. Cardholder personalization services have gained popularity in the USA this year. Wal-Mart has added the option to its gift card program and MasterCard recently announced a similar service for its members. MasterCard introduced its proprietary “MasterCard Card Customization Services” two weeks ago that allows issuers to offer consumer and small business cardholders the ability to create their own unique credit, debit or prepaid cards. Wal-Mart Stores introduced its personalized gift card program in early November, charging an $0.88 fee. (CF Library 11/14/05 and 11/21/05)
Rosh Pina-based On Track Innovations posted revenues for the third quarter of $12.1 million, a 120% jump over the same period of last year.
The Company says the increase in revenues represents the rapid
advancements in the contactless market around the world and in
particular the U.S. market, where it will deliver contactless solutions
for more than ten million payment cards in 2005. During the third
quarter, OTI completed a series of strategic acquisitions in China,
increasing manufacturing capacity to 1.5 million units per week by the
second half of 2006. The Company also completed a $22.2 million private
placement of new equity financing with institutional investors from the
US, Switzerland and England. For complete details on OTI’s third
quarter performance, visit CardData (www.carddata.com).
The way has been cleared for the acquisition of Metris Companies by HSBC. HSBC said the merger would be dependent on Metris resolving its issues with the SEC. The Midwest Regional Office of the SEC informed Metris that it does not intend to recommend that the SEC bring an enforcement action against Metris with respect to its pending investigation. The SEC investigation, first disclosed by Metris in August 2003, concerns the company’s reporting and treatment of allowance for loan losses for 2001 and its valuation of retained interests in securitized loans. In August, Metris received a “Wells Notice” from the SEC covering the CEO and its controller. HSBC says the recent SEC statement has satisfied the conditions of the sale. Metris stockholders are expected to approve the merger tomorrow and it will likely close on December 1st. In August, HSBC Finance announced it was buying Metris Companies for about $1.6 billion in cash. (CF Library 7/13/05; 8/4/05)
Portland, OR-based TRM reported that gross sales more than doubled again in the third quarter to $59 million, compared to $29 million one-year ago. ATM operating income increased 39% to $3.5 million during the quarter but was down significantly from the prior quarter’s $5.0 million. ATM operating reflects increasing economies of scale in the ATM business, but have been offset by eFunds transition costs and unusually high cash losses in the Company’s UK ATM operations as a result of a significant increase in ATM theft. TRM acquired eFunds ATM network last year, adding 15,700 ATMs to its network. During the third quarter, TRM agreed to purchase the U.K-based ATM business of Travelex UK for approximately $78 million. At the end of the quarter, TRM had 22,243 ATMs producing total withdrawals of 20.0 million during 3Q/05. For complete details on TRM’s third quarter performance, visit CardData ([www.carddata.com]).
TRM GROSS SALES
1Q/04: $25.9 million
2Q/04: $28.8 million
3Q/04: $29.0 million
4Q/04: $26.6 million
1Q/05: $58.8 million
2Q/05: $61.4 million
3Q/05: $59.2 million
Source: CardData (www.carddata.com)
TSYS has renewed its multi-year relationship with Allied Irish Banks to
provide processing services for its portfolio of consumer, retail and
commercial credit-card accounts. AIB is one of the first clients of TSYS
in Europe to provide processing services for its portfolio of consumer,
retail and commercial credit-card accounts. AIB converted from its
in-house processing system to the industry-leading “TS2” payments engine
in 2001. Allied Irish Banks total assets are 102 billion euros.