Companies Announce New Agreement to Extend and Expand Existing Strategic Partnership Capital One to Acquire Equity Position
MCLEAN, VA (November 19, 2007)Capital One Financial Corporation (NYSE:COF - News) and NetSpend Holdings, Inc. announced today that they have mutually agreed to the termination of their previously announced acquisition agreement and that they have entered into a Letter of Intent to expand their existing strategic relationship. As part of the expanded strategic relationship, Capital One intends to acquire a minority interest in NetSpend, a leading retail marketer of prepaid debit cards, along with an option to purchase additional shares of the company. In addition, the parties expect that a Capital One representative will join the NetSpend Board of Directors.
Together, Capital One and NetSpend intend to jointly pursue the distribution of prepaid card products through a variety of mainstream retail channels.
"We are excited about expanding our efforts with NetSpend into the mainstream U.S. retail marketplace," said Kent Ivanoff, Capital One's EVP, U.S. Card. "This partnership further strengthens our ability to offer flexible, safe and reliable payment alternatives to millions of consumers. We are confident that this alliance will bring tremendous value to both companies and that it will continue to drive our efforts in the prepaid marketplace to the next level."
"Our partnership with Capital One provides us with a tremendous opportunity to further extend our visibility in the growing prepaid market," said Rick Savard, NetSpend's CEO. "We believe that Capital One's investment in NetSpend and their participation on our Board will further drive alignment of our long-term objectives across the prepaid market. By leveraging each company's strengths, we can continue to deliver innovative products, drive sales and help build even greater loyalty for our merchant partners."
Capital One's acquisition of an equity position in NetSpend is not expected to have a material effect on Capital One's earnings per share in 2008.
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