EVERTEC, Inc. (NYSE: EVTC) (“Evertec” or the “Company”) today
announced that the Company has closed the previously announced
Popular Transaction and the BBR, SpA ("BBR") acquisition.
As part of the Popular Transaction, the Company modified and
extended the main commercial agreements with Banco Popular of
Puerto Rico (“BPPR”) and its parent, Popular, Inc. (NASDAQ: BPOP)
(“Popular”). As previously disclosed, the new agreement includes a
10-year extension of the Merchant Acquiring Independent Sales
Organization Agreement (the “ISO Agreement”), a 5-year extension of
the ATH Network Participation Agreement and a 3-year extension of
the Master Services Agreement ("MSA"). The ISO Agreement, which
sets the terms of the merchant acquiring relationship with Popular,
will now include a revenue sharing provision with Popular.
Modifications to the MSA include the elimination of the exclusivity
requirement, the inclusion of annual MSA minimums through 2028, a
10% discount on certain MSA services beginning in October 2025, and
adjustments to the previous CPI pricing escalator clause. The
agreement also calls for the sale to Popular of certain assets in
exchange for approximately 4.6 million shares of Popular owned
Evertec stock. In addition, subsequent to the closing of the
Popular transaction, Popular has agreed to take certain actions to
ensure that Evertec is no longer deemed a “subsidiary” of Popular
for purposes of the Bank Holding Company Act, including reducing
Popular's voting interest in Evertec to 4.5% over the next three
months through either the sale of shares or conversion to
non-voting preferred shares.
Goldman Sachs & Co. LLC served as lead financial advisor to
Evertec. Evercore also served as financial advisor to
Evertec.
The Company has also completed the acquisition of 100% of the
outstanding shares of BBR for an aggregate purchase price of CLP
48,600 million, approximately USD$53 million. Based in Santiago,
Chile BBR is a payment solutions and business technology company
with operations in Chile and Peru.
Mac Schuessler, President and Chief Executive Officer stated,
“We are pleased to complete both of these transactions. The Popular
Transaction extends our relationship with our largest customer
while the BBR acquisition continues to expand our footprint in
Latin America, two important steps in continuing to execute on our
long-term growth strategy."
About Evertec
EVERTEC, Inc. (NYSE: EVTC) is a leading full-service transaction
processing business in Puerto Rico, the Caribbean and Latin
America, providing a broad range of merchant acquiring, payment
services and business process management services. Evertec owns and
operates the ATH® network, one of the leading personal
identification number (“PIN”) debit networks in Latin America. In
addition, the Company manages a system of electronic payment
networks and offers a comprehensive suite of services for core
banking, cash processing and fulfillment in Puerto Rico, that
process over three billion transactions annually. The Company also
offers technology outsourcing in all the regions it serves. Based
in Puerto Rico, the Company operates in 26 Latin American countries
and serves a diversified customer base of leading financial
institutions, merchants, corporations and government agencies with
“mission-critical” technology solutions. For more information,
visit www.evertecinc.com.
Forward Looking Statements
Certain statements in this press release constitute
“forward-looking statements” within the meaning of, and subject to
the protection of, the Private Securities Litigation Reform Act of
1995. Such forward-looking statements involve known and unknown
risks, uncertainties, and other factors that may cause the actual
results, performance or achievements of EVERTEC to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Statements
preceded by, followed by, or that otherwise include the words
“believes,” “expects,” “anticipates,” “intends,” “projects,”
“estimates,” and “plans” and similar expressions of future or
conditional verbs such as “will,” “should,” “would,” “may,” and
“could” are generally forward-looking in nature and not historical
facts. Any statements that refer to expectations or other
characterizations of future events, circumstances or results are
forward-looking statements.
Various factors that could cause actual future results and other
future events to differ materially from those estimated by
management include, but are not limited to: the Company’s reliance
on its relationship with Popular, Inc. (“Popular”) for a
significant portion of its revenues pursuant to the Company’s
Master Services Agreement ("MSA") with them, and to grow the
Company’s merchant acquiring business; as a regulated institution,
the likelihood that the Company will be required to obtain
regulatory approval before engaging in certain new activities or
businesses, whether organically or by acquisition, and its
potential inability to obtain such approval on a timely basis or at
all, which may make transactions more expensive or impossible to
complete, or make us less attractive to potential sellers; the
Company’s ability to renew its client contracts on terms favorable
to the Company, including the contract with Popular, and any
significant concessions the Company may grant to Popular with
respect to pricing or other key terms arising out of any disputes
or in anticipation of the negotiation of the extension of the MSA,
both in respect of the current term and any extension of the MSA;
the Company’s dependence on its processing systems, technology
infrastructure, security systems and fraudulent payment detection
systems, as well as on the Company’s personnel and certain third
parties with whom it does business, and the risks to the Company’s
business if its systems are hacked or otherwise compromised; the
Company’s ability to develop, install and adopt new software,
technology and computing systems; a decreased client base due to
consolidations and failures in the financial services industry; the
credit risk of the Company’s merchant clients, for which it may
also be liable; the continuing market position of the ATH network;
a reduction in consumer confidence, whether as a result of a global
economic downturn or otherwise, which leads to a decrease in
consumer spending; the Company’s dependence on credit card
associations, including any adverse changes in credit card
association or network rules or fees; changes in the regulatory
environment and changes in international, legal, tax, political,
administrative or economic conditions; the geographical
concentration of the Company’s business in Puerto Rico, including
its business with the government of Puerto Rico and its
instrumentalities, which are facing severe political and fiscal
challenges; additional adverse changes in the general economic
conditions in Puerto Rico, whether as a result of the government’s
debt crisis or otherwise, including the continued migration of
Puerto Ricans to the U.S. mainland, which could negatively affect
the Company’s customer base, general consumer spending, the
Company’s cost of operations and the Company’s ability to hire and
retain qualified employees; operating an international business in
Latin America and the Caribbean, in jurisdictions with potential
political and economic instability; the Company’s ability to
protect its intellectual property rights against infringement and
to defend itself against claims of infringement brought by third
parties; the Company’s ability to comply with U.S. federal, state,
local and foreign regulatory requirements; evolving industry
standards and adverse changes in global economic, political and
other conditions; the Company’s level of indebtedness and
restrictions contained in the Company’s debt agreements, including
the secured credit facilities, as well as debt that could be
incurred in the future; the Company’s ability to prevent a
cybersecurity attack or breach to its information security; the
possibility that the Company could lose its preferential tax rate
in Puerto Rico; the possibility of future catastrophic hurricanes,
earthquakes and other potential natural disasters affecting the
Company’s main markets in Latin America and the Caribbean;
uncertainty related to the effect of the discontinuation of the
London Interbank Offered Rate at the end of 2021; and the continued
impact of the COVID-19 pandemic and measures taken in response to
the outbreak, on the Company’s resources, net income and liquidity
due to current and future disruptions in operations as well as the
macroeconomic instability caused by the pandemic.
Consideration should be given to the areas of risk described
above, as well as those risks set forth under the headings
“Forward-Looking Statements” and “Risk Factors” in the reports we
file with the SEC from time to time, in connection with considering
any forward-looking statements that may be made by us and our
businesses generally. We undertake no obligation to release
publicly any revisions to any forward-looking statements, to report
events or to report the occurrence of unanticipated events unless
we are required to do so by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20220701005036/en/
Investor Contact (787) 773-5442 IR@evertecinc.com
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