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Visa (V) to Buy Earthport for Cross-Border Portfolio Boost

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Visa Inc.V recently announced its bid to purchase Earthport Plc. for 198 million pounds or $250.6 million. The to-be-acquired company facilitates international transactions for banks and businesses. For this buyout, Visa's unit Visa International Service Association has offered 30 pence for each Earthport share, which is four times Monday's closing price.

After the offer was announced at the London Stock Exchange on Thursday, shares of Earthport skyrocketed 270%.

The Earthport stock has witnessed a downfall of 28% this year so far along with escalating costs and losses. The firm provides affordable alternatives to conventional payment systems by enabling banks and money moving entities to have a solo alliance in place of a range of relationships worldwide. The deal is expected to help Earthport grow and it would also benefit the firm's employees, partners and stakeholders.

Notably, this is yet another initiative by Visa to expand its cross-border payments portfolio. In the first three quarters of 2018, its volume of cross-border transactions expanded 10%. The company has a huge presence in Russia. As a developed economy, Russia is growing domestically and in outbound travel, which contributes significantly to Visa's cross-border business growth. China represents a long-term opportunity. The company believes that Japan business will take off over the next few years. The Japanese government's emphasis on driving electronic and digital payments provides an immense growth potential.

In yet another market, which is India, the demonetization drive has led to considerable growth in domestic transaction process. The company's strong international operations have boosted higher cross-border transactions for the last many quarters and we expect this trend to continue going forward. Visa's international payments volume growth is projected to stay strong and stable in 2019.

Shares of this Zacks Rank #3 (Hold) company have rallied 15.8% in a year's time, outperforming the industry 's growth of 7.3%.

Stocks to Consider

Investors interested in the same space may take a look at some better-ranked stocks like Evertec, Inc. EVTC , Cardtronics plc CATM and Green Dot Corporation GDOT , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

EVERTEC engages in transaction processing business in Latin America and the Caribbean. It managed to pull off average four-quarter earnings surprise of 16.99%.

Cardtronics provides automated consumer financial services through its network of automated teller machines and multi-purpose financial services kiosks. The company delivered average four-quarter positive surprise of 50.24%.

Green Dot operates as a pro-consumer bank holding company, providing personal banking for the masses. The company came up with average four-quarter beat of 18.40%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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