Visa acquires Cybersource to speed up online payments and e-commerce.
Visa acquires Cybersource. Visa on Wednesday accelerated its push into online payments and e-commerce, agreeing to buy Cybersource, an electronic payments company, for about $2bn in cash.
The deal, which values Cybersource at about $26 a share, comes just a week after rival MasterCard launched a new division dedicated to bringing to market faster different forms of payment.
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The traditional payment processors are manoeuvring to ensure their position is not eclipsed by emerging technology and online rivals such as PayPal. American Express last year announced it was buying Revolution Money, an online processor, for $300m.
Cybersource, which helps retailers protect themselves against fraudulent online payments using its software, processes about a quarter of all US ecommerce transactions, by dollar value.
The company counts British Airways, Home Depot and Facebook among its clients and last year had revenues of $265m and net income of $11m.
About 8 per cent of Cybersource’s revenues came from outside the US in the fourth quarter of last year.
The deal with Visa should help to spur the company’s international growth, with Asia and Latin America expected to be early priorities.
The price reflects about a 34 per cent premium to where Cybersource shares closed on Tuesday.
That values Cybersource at about 19 to 20 times adjusted 2011 earnings, according a source close to the deal – roughly in line with where Visa itself trades.
The acquisition of Cybersource would leave few sizable businesses for rivals looking to accelerate in electronic payments. PayPal, which is owned by Ebay, is rapidly growing its activity away from the online auction site and is becoming more important to the company as its auction model falls out of favour with consumers.
Cybersource, which was founded in 1994, listed on Nasdaq in 1999 as the dotcom bubble approached its apex.
The company greatly expanded its presence among small businesses with the acquisition of Authorize.net in 2007 and now works with more than 295,000 merchants using both brands.
Visa and Cybersource have worked together since 1999 and Cybersource’s chief executive, Michael Walsh, will stay on to oversee its operations.
Shares in Visa slipped 0.61 per cent to $93.48 in afternoon trade in New York. Cybersource stock jumped almost 32 per cent to trade at $25.65 a share.
JPMorgan advised Visa on the deal while Goldman Sachs acted for Cybersource.
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