Citi, which had previously announced its plans to sell off its prepaid business has agreed to sell it to German banking company Wirecard AG.
The combined share and asset deal, subject to regulatory approval and other closing conditions, is expected to close in the fourth quarter when the total purchase price is due for payment in cash to Citi Holdings, according to an announcement. Wirecard is estimating an EBITDA contribution of the acquired business of more than US$20 million (€18 million) for fiscal year 2017. Financial terms of the transaction weren’t disclosed.
The deal comes right before the release of the final prepaid regulations from the Consumer Financial Protection Bureau. Citi’s business has focused primarily on incentives and other corporate disbursements, but it could still face disruption depending on the terms of the final rules. It is also not clear whether Citi will continue to issue prepaid cards even though it is selling off this part of its business.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group
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