NetSpend, a publicly traded provider of prepaid debit cards, is being sold to Tsys for $1.4 billion, the companies announced on Tuesday.
As part of the deal, Tsys, a provider of global payments, would give NetSpend shareholders $16 a share in cash.
NetSpend caters to consumers who do not have a traditional bank account or who rely on alternative financial services. Prepaid debit cards are also popular ways for retail outlets to create special branded cards for consumers.
NetSpend says it serves more than 2.4 million accounts, 46 percent of which are direct deposit accounts. It says more than 500 retail distributors use its products.
The deal “enables us to meet our strategic goals of diversifying our business, being a more innovative payment solutions provider and expanding our role within an area of payments,†Philip W. Tomlinson, chairman and chief executive of Tsys, said in a statement.
Houlihn Lokey was the financial adviser to Tsys, and King & Spalding was the legal counsel. Bank of America Merrill Lynch was NetSpend’s financial adviser, and Fried Frank served as legal counsel.
