- Global Payments to sell Netspend for more than £1.55 billion.
- Oppenheimer reaffirms its buy rating on Global Payments.
- Netspend has partnerships with Walmart and Western Union.
Sources confirmed on Friday that Global Payments Inc. (NYSE: GPN) is seeking a potential buyer for its Netspend unit. The company expects a valuation of over £1.55 billion to offload its prepaid debit card business.
Shares of the company closed the regular session on Friday about 1.5% up. Including the price action, Global Payments Inc. is now exchanging hands at £138 per share after recovering from a year to date low of £89.75 per share in March, when the impact of the COVID-19 crisis was at its peak.
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
At the start of 2020, Global Payments was trading at a slightly higher £143.50 per share. Interested in investing in the stock market online? Here’s a simple guide to get you started.
Oppenheimer reaffirms its buy rating on Global Payments
According to the sources, Global Payments has hired an investment bank to help it with the process of divestment. It started approaching buyers to market Netspend in September. Analyst Dominick Gabriele of Oppenheimer reaffirmed his ‘buy’ rating on Global Payments in mid-September with a price target of £153.09 per share.
Following the divestment, Global Payments is likely to use the money to expand its investments in its core businesses that are expected to be the primary drivers of growth for the company in the future.
A representative for Global Payments refused to comment any further at this stage. Global Payments participated in J.P. Morgan’s U.S. all-stars conference in mid-September.
Netspend was established in 1999 and catered to individual and business customers with rechargeable debit cards. The service is particularly more useful for customers that are not optimally served by traditional financial institutions, including banks.
Netspend has partnerships with Walmart and Western Union
According to its business website, Netspend has partnered with prominent names over the years, including Walmart, Western union, and 7-Eleven. In separate news from the United States, sources said on Friday that Airbnb (home rental service) was aiming at raising £2.32 billion in its initial public offering (IPO), later this year.
In 2013, Total System Services bought the Austin-based company for £1.08 billion. Later in 2019, Global Payments acquired Total System Services for £16.62 billion in 2019 that brought Netspend to its portfolio.
At the time of writing, the American company that provides financial technology services globally has a market cap of £41.28 billion and a price to earnings ratio of 120.93.