First Data Corp. announced today that it has entered an agreement with FLEETCOR Technologies Inc. to create a join gift card venture with FLEETCOR’s SVS division.
The new joint venture combines the gift card businesses of both companies. This includes First Data’s core gift card business, Transactions Wireless, Inc.™, and Gyft®, along with FLEETCOR’s Stored Value Solutions (SVS) prepaid card services and gift card program management assets. The new entity will provide clients with broader international reach and a more robust end-to-end offering.
The combined revenue of the businesses that are to be contributed to the joint venture by both companies was $362 million in 2016. First Data will own 57.5 percent of the joint venture and FLEETCOR will own 42.5 percent.
The deal is subject to regulatory approval. In its press release, First Data said that the joint venture would expand digital card distribution for SVS clients through First Data’s Gyft and Transaction Wireless divisions. The deal will expand the business opportunities for First Data and may help SVS win additional clients.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group
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