BofA, First Data Launch Transaction Venture
BofA will own 46.5% of the business, Banc of America Merchant Services LLC, while Denver-based First Data will own 48.5%.
June 29, 2009
Bank of America and First Data Corp., a portfolio company of Kohlberg Kravis Roberts, have launched a joint transaction processing business.
Terms call for Charlotte, N.C.-based BofA to own 46.5% of the business, named Banc of America Merchant Services LLC, while Denver-based First Data will own 48.5%. Another investor, Rockmount Investments LLC, will own the remaining 5%. Additional financial details were not disclosed.
BofA Merchant Services will provide merchants with electronic commerce services. It will initially serve 380,000 merchant accounts, which contribute more than one billion transactions each month.
Thomas Bell, chief strategy officer and president of First Data's financial services business, was appointed chief executive of the new business.
Wachtell, Lipton, Rosen & Katz served as legal advisor to Bank of America, whereas Sutherland Asbill & Brennan and Perkins Coie were First Data's joint legal advisors.
The deal is the latest transaction processing joint venture, which follows Advent International's purchase of a 51% stake in Fifth Third Bancorp's merchant processing business for $561 million in March. It valued the transaction processing business at $2.3 billion.
Fifth Third Processing Solutions, as the business is named, isn't small. It processed more than 28.4 billion ATM and point-of-sale transactions in 2008, or $292 billion worth of debit and credit card purchases.
KKR, meanwhile, acquired First Data for $29 billion in September 2007.
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