amela A. Joseph, Chief Executive Officer of NOVA Information Systems, said on a recent conference call that, subject to regulatory approval, NOVA is set to close its acquisition of First Horizon Merchant Services' (FHMS) merchant processing business on March 1, 2006.

The purchase will make NOVA, a U.S. Bancorp subsidiary, the nation's second largest acquirer of hospitality transactions and give the company significant presence in all merchant segments.

With the addition of FHMS' 53,000 merchant locations and $25 billion in annual processing volume, NOVA expects the combined portfolio of 850,000 merchants to generate an annual volume in excess of $150 billion.

"First Horizon is a well-established and highly recognized market leader with a history of strong performance and solid growth," Joseph said. "Their impressive national merchant base, specialized product portfolio, network infrastructure and experienced staff complement our existing business and expand our reach into the travel and entertainment sector."

The agreement contains a 10-year, exclusive marketing relationship with First Horizon National Corp. and its parent company First Tennessee Bank, allowing NOVA to provide merchant products and services at all the bank's 208 branches. It also brings NOVA's international processing capability to First Horizon's national accounts and leverages NOVA's hospitality products globally.

"NOVA now processes for 200,000 merchants internationally, and we actually service many hotels outside of the U.S.," Joseph said.

"We'll now have products and solutions, once we internationalize them, in all of the 18 countries that we currently service. "More important, First Horizon has a number of hotel chains that are international in scope. This is a great opportunity to provide them with international processing capability, something that First Horizon was unable to do."