MasterCard acquires Fintech company VocaLink for £700M

MasterCard Incorporated, a financial service giant has announced that it has entered into a definitive agreement to acquire 92.4 percent of fintech firm VocaLink Holdings Ltd for £700 million.

According to the official release, the acquisition accelerates the efforts of MasterCard to be an active participant in every electronic payment and payment flows. Also, it enhances MasterCard’s services for partner’s and customer’s benefits. With this acquisition, MasterCard will play a more strategic role in UK payments ecosystem.

“We’re excited about the opportunity to play a bigger role in payments in the UK, a very strategic market for us,” Ajay Banga, president and CEO of MasterCard said. “VocaLink is a unique company with outstanding technology, assets and people. We look forward to investing in and maximizing the technology, and embedding it in our products and solutions, both in the UK and around the world.”

When the performance targets are met, the existing shareholders of VocaLink will have the potential for an earn-out of up to an additional £169 million. This is subjected to the approval of regulatory and other customary closing conditions. A majority of the company’s shareholders under this agreement will retain 7.6 pct ownership for at least three years.

“Today’s announcement is positive news for our partners, customers and employees. We will continue to focus on ensuring that the UK systems perform seamlessly, maintaining the highest levels of quality. At the same time, we’ll invest in further innovation to power competitive payments solutions for consumers and businesses around the globe,” David Yates, CEO of VocaLink said.

MasterCard is expecting the transaction to be dilutive for up to 24 hours after the deal closure. The company estimates that the transaction would be 5 pct dilutive to each 2017 and 2018 earnings per share.

MasterCard Incorporated is a technology company in the global payments industry.  It operates the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories.