Visa Inc. to Acquire CyberSource to Accelerate eCommerce Growth — SAN FRANCISCO and MOUNTAIN VIEW, Calif., April 21 /PRNewswire-FirstCall/ –


Visa Inc. to Acquire CyberSource to Accelerate eCommerce Growth — SAN FRANCISCO and MOUNTAIN VIEW, Calif., April 21 /PRNewswire-FirstCall/ –.

Strengthens Visa’s Leadership in Global eCommerce by Expanding Online Payment, Fraud and Security Management Capabilities

Enables Visa to Offer New and Enhanced Online Fraud Prevention Services to Merchants, Financial Institutions and Consumers

SAN FRANCISCO and MOUNTAIN VIEW, Calif., April 21 /PRNewswire-FirstCall/ — Visa Inc. (NYSE: V) (“Visa”) and CyberSource Corporation (Nasdaq: CYBS) (“CyberSource”) today announced that they have entered into a definitive agreement for Visa to purchase CyberSource, a leading provider of electronic payment, risk management and payment security solutions to online merchants at a price of $26.00 per share, or total consideration of approximately $2.0 billion to be paid with cash on hand.

CyberSource is an established industry leader that plays a role in processing approximately 25 percent of all eCommerce dollars transacted in the United States.  The company serves more than 295,000 merchants through its CyberSource and Authorize.Net branded solutions.  CyberSource clients include British Airways, Home Depot, Facebook, Google and many small businesses.

The acquisition of CyberSource will result in a compelling combination whose assets and expertise are expected to drive long-term growth by:  

  • Accelerating the growth of the eCommerce category thereby also increasing the usage of Visa debit, prepaid and credit products for online purchases.
  • Drawing on Visa’s financial institution relationships and global presence to more rapidly drive international expansion of CyberSource’s products and services.  Today the majority of CyberSource’s revenues are generated in the United States, leaving tremendous opportunity for global growth.
  • Building on CyberSource’s relationships with merchants to expand the adoption and enhance the functionality of other Visa eCommerce solutions such as Rightcliq.
  • Delivering best-in-class fraud management services to accelerate adoption of CyberSource solutions.
  • Increasing adoption of CyberSource’s secure payment data hosting solutions to address a growing merchant need.

 

These benefits will be realized by merchants and financial institutions alike.  Together, Visa and CyberSource will help merchants increase revenue through global growth while minimizing monetary loss from fraud and provide them with fast and efficient connectivity to multiple payment networks, including Visa. For financial institutions acquirers, Visa will deliver added value by providing new business referrals from eCommerce merchants.

“Online commerce continues to grow rapidly, and this acquisition will enable Visa to offer new and enhanced services that will better meet the growing demand among merchants globally for robust, secure online payment processing capabilities which in turn will grow the entire eCommerce category,” said Joseph W. Saunders, Chairman and CEO of   Visa Inc.  “With CyberSource, we are adding a new suite of leading eCommerce capabilities and experience in addressing eCommerce merchant needs. And, as eCommerce increasingly migrates to mobile devices, we believe the combination of Visa and CyberSource technology and services will position Visa to lead in mobile eCommerce.”

The two companies are a proven team, having partnered since 1999, and currently collaborate on risk models built into CyberSource’s automated fraud management solutions.

“By joining forces with the world’s foremost payments company, we will have the opportunity to utilize Visa’s regional expertise and global presence to drive international adoption of CyberSource in key geographies,” said Michael Walsh, President and CEO of CyberSource Corporation.  

“We are excited to build on the existing relationship we have with Visa and extend the reach and capabilities of our eCommerce payment platform for small businesses and international brands around the world,” said William S. McKiernan, Executive Chairman and Founder of CyberSource.

“The acquisition of CyberSource aligns with Visa’s long-term strategic plan to identify and invest in opportunities today that will drive future growth and deliver enhanced value to Visa and our clients,” said Saunders.

Visa expects this transaction to be approximately $0.04 to $0.05 dilutive to its fiscal fourth quarter 2010 earnings per share on a GAAP basis, due to acquisition-related amortization and one-time transaction costs.  Visa expects this transaction to be slightly dilutive to its fiscal full-year 2011 earnings per share on a GAAP basis, primarily related to amortization of intangible assets.

CyberSource’s President and CEO, Michael Walsh, will continue to oversee CyberSource’s operations.  CyberSource’s Executive Chairman and Founder, William S. McKiernan, will join Visa as an Executive Advisor to assist in the integration of the two businesses.

The transaction is subject to customary closing conditions, including approval by the stockholders of CyberSource and required regulatory approvals. The transaction, which has been approved by the Visa and CyberSource boards of directors, does not require a Visa stockholder vote and is expected to close in Visa’s fourth fiscal quarter of 2010.  

Visa and CyberSource will host a conference call today at 5:30 a.m. Pacific time (8:30 a.m. Eastern time) to discuss the transaction. The dial-in information for the call is 888-790-4410 (within the United States) or 773-756-0127 (international). The conference passcode is GATEWAY. A replay of the call will be available until May 19 and can be accessed by dialing 800-925-4998 (within the United States) or 402-220-4330 (international).  The live call and replay, along with supporting materials, can also be accessed through the Investor Relations section of Visa’s website at www.investor.visa.com.

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