Visa Inc. · NYSE:V
Visa — Merger or Acquisition (November 2015)
17 slides from Visa's merger presentation, Nov 2, 2015
Slide 1: Visa Inc. to Acquire Visa Europe
Visa Inc. to Acquire Visa Europe November 2, 2015
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are identified by words such as "expect,” “outlook,” "will," "potential" and other similar expression
Slide 3: Transaction Overview
Transaction Overview Visa Inc. announces a definitive agreement to acquire Visa Europe from European member banks • €16.5B upfront consideration consisting of cash and preferred stock Purchase Price • Up to €4.0B earn-out and €0.7B in interest on earn-out Upfront • €11.5B cash Consideration • Prefer
Slide 4: Transaction Rationale
Transaction Rationale Strategically Important – for Visa Europe Strategically Important – for Visa Inc. • Provides direct access to industry-leading • Creates a truly integrated global leader products, services, capital and talent • Capitalizes on strong growth opportunities in a • Technology and ma
Slide 5: Attractive Growth Opportunity
Attractive Growth Opportunity European Payments Landscape VE’s Geographic Footprint Greenland • Territory includes 38 countries with over Finland $3 trillion total card industry payments Iceland Norway volume in aggregate Sweden Estonia Latvia • Cash and check represent a $3.3 trillion United Denmar
Slide 6: Visa Europe – Current Snapshot
Visa Europe – Current Snapshot Visa Europe Overview FY14 Key Performance Indicators • Leading European payments Payments Volume Growth 10.4% technology company connecting (FY09-FY14 CAGR) consumers, businesses, financial institutions and governments Net Revenue €1,298M • Independently owned by over
Slide 7: Integrated Global Leader
Integrated Global Leader Visa Inc. VI + VE % Change Financial Institution Clients ~ 14,000 ~ 17,000 + 21% Cards in Force ~ 2.4B ~ 2.9B + 21% Payments Volume ~ $4.9T ~ $6.5T + 33% Net Revenue $13.9B $15.5B + 12% Operating Income $9.1B $9.5B + 5% FI clients and cards in force as of quarter ended June
Slide 8: Integrated Global Leader: Payments Volume
Integrated Global Leader Visa Inc. VI + VE CEMEA EUROPE 13% NORTH 17% NORTH AMERICA Cards in Force AMERICA 35% 29% LAC CEMEA 18% 11% LAC AP AP 15% 28% 34% CEMEA LAC 5% EUROPE Payments Volume 8% 28% NORTH NORTH AMERICA AMERICA 42% AP 29% 58% CEMEA 3% LAC 6% AP 21% Cards in force as of quarter ended J
Slide 9: Post Acquisition Plans
Post Acquisition Plans • Clients in Europe will benefit from deeper commercial relationships • Innovative products and services • Competitive mindset Focus • Maintain strong European presence • Empowered European leadership team and in-country resources • Local data center • Differentiated country a
Slide 10: Financial Impact to Visa Inc.
Financial Impact to Visa Inc. • Expected to be EPS dilutive in FY16 (stub year) in low single-digit percentage point range before one time integration costs due to issuance of preferred stock, timing of buybacks, and issuance of debt relative to the timing of close • Expected to be EPS accretive in
Slide 11: Establishes VI’s Long-term Capital Structure
Establishes VI’s Long-term Capital Structure • $15B to $16B of debt expected to be issued between late November and January – Fund upfront cash consideration – Provide capacity to increase stock buybacks to offset the effect of the issuance of Preferred Stock – Establish a long-term capital structur
Slide 12: Sources and Uses of Cash (Illustrative)
Sources and Uses of Cash (Illustrative) In U.S. Dollars. Assumes 4/1/16 Closing Date Sources ($B) Uses ($B) New debt $15.0 – $16.0 Upfront cash consideration $12.8 VE cash 2.3 Transaction expenses 0.2 Cash to VI balance sheet 4.3 – 5.3 Total Sources $17.3 – $18.3 Total Uses $17.3 – $18.3 • Funding n
Slide 13: Preferred Stock Structure
Preferred Stock Structure • Allows VE members to share in the growth of the combined business • Preferred stock, along with UK Loss Sharing Agreement, creates two new layers of safeguards against liabilities from legal actions relating to interchange in the Visa Europe territory – Two series of pref
Slide 14: Accounting Considerations
Accounting Considerations • Earn-out accounted for as contingent consideration reflecting additional upside to both parties if net revenue targets are achieved – Fair value of obligation recorded as a liability on balance sheet at close, based on probability-weighted estimate of payout – Marked-to-m
Slide 15: Summary
Summary Strategically important to both Visa Inc. and Visa Europe • Creates even stronger integrated global leader • Delivers Visa Inc.’s scale, resources and capabilities to European clients • Capitalizes on strong growth opportunities in attractive region Financially compelling • Balanced consider
Slide 16: Appendix
Appendix VISA
Slide 17: Visa Europe Consolidated Income Statement
Visa Europe Consolidated Income Statement €’000 FY13 FY14 Revenue 1,198,462 1,297,598 Other operating income 2,675 2,186 Administrative expenses (927,115) (918,084) Other (expenses)/income (14,253) (39,976) Operating profit 259,769 341,724 Finance income 2,270 2,738 Dividend income 554 650 Finance c