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Heartland
Sells Small Merchants to NPC, Ends the Decade Debt-Free
The
sign of a really great deal is when both sides are pleased and
believe that they got the better deal. So it is with the sale of a portion
of the Heartland Bank portfolio to NPC.
It
was announced January 3 that National Processing, Inc., had purchased a
merchant processing portfolio, consisting of 15,000 regional accounts,
from Heartland Payment Systems LLC. The purchase represented approximately
one‑third of Heartland’s total portfolio, according to sources at
Heartland. “The small accounts sold represent the majority of our small
merchant accounts with processing volume below $10,000 per month,” noted
Heartland’s Chief Executive, Bob Carr.
The
merchants will be converted to the NPC platform beginning in April 2000
with a completion date targeted for the third quarter of the year.
Considering Heartland’s growth rate, by the time the merchants are
converted off HPS, they will all be replaced with new merchants.
“I
think the one newsworthy event here is that our sales people will be
receiving over $6,000,000 of ‘portfolio equity’ cash as these
merchants are converted to NPC. This may be the largest payment of cash to
sales people for a partial portfolio sale by their employer. This has been
part of the HPS covenant with our salespeople and I am very proud to honor
it! This is a validation of our business model,” said Carr.
NPC
will provide point-of-sale credit card and online debit card transaction
processing for the accounts, which represent more than $2 billion in
annual transactions conducted with local and regional merchants. Prior to
the acquisition NPC handled more than $100 billion in POS credit card
transactions. NPC is the nation’s second largest processor of POS credit
card transactions, serving approximately 470,000 merchants and processing
one out of every six Visa and MasterCard transactions in the U.S.
“The
addition of these new accounts increases National Processing’s market
share with profitable new volume in our regional merchant processing
business. This provides local merchants the same state-of-the-art
transaction processing that we deliver to some of the country’s largest
national retailers,” said NPC chief executive officer Tom Wimsett.
“We’ve been pleased with the internal growth that we’ve been able to
achieve in the merchant processing arena and are happy to add to that
growth with this acquisition,” he added. Wimsett estimated the new accounts acquired from Heartland would generate approximately $15 million in additional annual revenue for National Processing and would immediately be accretive to the company’s earnings.
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