MasterCard to buy majority 92.4% in London-based VocaLink Holdings for $920 mn

Payment network provider MasterCard Inc yesterday struck a deal to buy a majority 92.4 per cent stake in London-based VocaLink Holdings Ltd for about $920 million (£700 million) in order to expand its presence in the UK market.

VocaLink's existing shareholders have the potential for an earn-out of up to an additional £169 million ($220 million), if certain performance targets are met.

Under the deal, a majority of VocaLink's shareholders will retain 7.6 per cent ownership for at least three years.

Based in London, VocaLink operates key payments technology platforms on behalf of UK payment schemes, including BACS – the Automated Clearing House (ACH) for direct credit and direct debit payments between bank accounts, Faster Payments – the real-time account-to-account service enabling payments via mobile, internet and telephone, and LINK – the UK ATM network.

VocaLink also provides ZAPP, a mobile payments app that leverages Fast ACH technology, and licenses its software and provides services to support ACH activities in Sweden, Singapore, Thailand and the US.

In 2015, the company reported revenues of £182 million and processed more than 11 billion transactions.

MasterCard said that the acquisition will allow it to play a more strategic role in the UK payments ecosystem, while bringing the innovation and knowhow from across the globe back to VocaLink's home market.

''We're excited about the opportunity to play a bigger role in payments in the UK, a very strategic market for us,'' said Ajay Banga, president and CEO, MasterCard. ''VocaLink is a unique company with outstanding technology, assets and people. We look forward to investing in and maximizing the technology, and embedding it in our products and solutions, both in the UK and around the world.''