First Data Corp. has entered into an agreement to acquire InComm today, only about 7 months after it was acquired by affiliates of Kohlberg Kravis Roberts & Co. The value and terms of the transaction has not been disclosed, however, the deal is estimated to be accretive for First Data and is expected to close next quarter.
InComm is an industry leader in marketing, distribution, and technology innovation of gift cards, prepaid wireless products, reloadable debit cards, digital music downloads, content, games, software and bill payment solutions. InComm generated $300 million in net revenues in 2007 on $8 billion in retail sales transactions. The combination will allow First Data and InComm to provide a full prepaid product suite.
This should be an interesting deal as First Data Corp. is a electronic commerce and payment processing services. At the time that KKR closed its merger, First data said it had over 5 million merchant locations, 1,900 card issuers and their customers, in its network. This may really allow the combined InComm & First Data channel to expand rapidly. Brooks Smith, the CEO of InComm will head First Data's Global Prepaid Services unit once the transaction closes.
Jon Ogg produces and edits the Special Situation Investing Newsletter for 247WallSt.com.
First Data gobbles up InComm, a pre-paid card services operation
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