MasterCard to Acquire Big Stake in U.K.'s VocaLink

By Anne Steele 

MasterCard Inc. on Thursday said it agreed to acquire most of London-based payment-technology company VocaLink Holdings Ltd. for about GBP700 million ($920 million), becoming the latest company to take advantage of the steep fall in the pound after last month's Brexit vote.

VocaLink operates key payments technology platforms on behalf of U.K. payment schemes and reported GBP182 million in revenue last year as it processed more than 11 billion transactions.

MasterCard said the deal enables it to "play a more strategic role in the U.K. payments ecosystem," which Chief Executive Ajay Banga called "a very strategic market for us."

MasterCard will take a 92.4% stake in the company and a majority of VocaLink's shareholders will retain 7.6% ownership for at least three years. Existing shareholders could earn up to an additional GBP169 million ($220 million) if performance targets are met.

VocaLink CEO David Yates will join the MasterCard management committee.

If the deal closes as expected in early 2017, MasterCard anticipates an additional 5 cents in each of 2017 and 2018 earnings per share.

Foreign bidders have made a raft of deals since Britain's referendum to leave the European Union on June 23 as the pound has dropped about 10% against the dollar in the past month. Perhaps most notably, U.S.-based cinema operator unit AMC Entertainment Holdings Inc. agreed to buy Europe's largest cinema chain, Britain-based Odeon & UCI Cinemas Group. It said the lower pound was a major factor, and AMC's CEO warned "there may even be a stampede of U.S. acquirers looking at the United Kingdom."

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

July 21, 2016 09:12 ET (13:12 GMT)

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