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Global Payments wants to focus on its core corporate customers.
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Global Payments
is putting Netspend, its prepaid debit card unit, up for sale again.
The parent, which has a $42.2 billion market capitalization, said Thursday it was conducting a strategic review of Netspend’s consumer business. Global Payments (ticker: GPN) plans to keep Netspend’s business-to-business assets, a statement said.
Global Payments revealed the review Thursday as it announced its fourth-quarter and full-year results. The Atlanta payments processor said profit increased 14.1% to $208.5 million, or 72 cents a share, for the quarter ended Dec. 31. Adjusted revenue rose 13.3% to $1.98 billion.
For 2021, net income soared 65.2% to $965.5 million, or $3.29 a share. Adjusted revenue was $7.74 billion, up 14.7% from the year before. Long-term debt rose 35% to $11.4 billion.
Jeff Sloan, Global Payments’ CEO, said the company is seeking to refine its portfolio and focus on its core corporate customers, which include merchants, financial institutions, software partners, and technology leaders. “As part of that initiative, we have commenced a strategic review of our Netspend consumer business to sharpen our focus on our B2B assets,” he said in prepared remarks. The consumer business has a favorable profile, but its customer base doesn’t overlap much with Global Payments’ traditional clients, he said.
Shares of Global Payments closed Thursday at $145.53, down 0.6%.
Founded in 1999, Netspend provides reloadable prepaid debit and payroll cards, demand deposit accounts, as well as other financial services. Its main competitors are Green Dot (GDOT), InComm Payments and
Fiserv
(FISV), according to Global Payments’ 2020 annual report.
Netspend is part of Global Payments’ business and consumer solutions unit. Under generally accepted accounting principles, revenue for the business rose 1.5% to $207.8 million for the quarter ended Dec. 31, while operating income was flat at about $28.3 million. For 2021, revenue increased by nearly 7% to $886.4 million, while operating income jumped 21% to $167.8 million.
The company doesn’t provide separate figures for the B2B and consumer operations.
Total Systems Services (TSYS) acquired Netspend in 2013 for $1.4 billion. Global Payments then bought TSYS in 2019 for $21.5 billion during a spate of consolidation among large payments processors. That year, Fidelity National Information Services (FIS) bought WorldPay for $34 billion, while Fiserv (FISV) scooped up First Data for $22 billion.
Global Payments tried to sell Netspend in 2020, hiring Evercore to run the process. The parent sought more than $2 billion for the business but was unable to get the price it wanted and ended up keeping Netspend. Global Payments was expected to put the unit up for sale in 2021, people familiar with the situation told Barron’s.
Netspend is the latest traditional fintech to go on the block. Earlier this week, NCR, a provider of ATMs and point-of-sale systems, also said it was launching a review of strategic alternatives.
Evercore didn’t immediately respond to messages seeking comment.
Write to Luisa Beltran at [email protected]
