Capital One and NetSpend Agree to Terminate Acquisition Agreement
Companies Announce New Agreement to Extend and Expand Existing Strategic Partnership Capital One to Acquire Equity Position
MCLEAN, Va.--(BUSINESS WIRE)--Nov. 19, 2007--Capital One Financial Corporation (NYSE:COF) 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.
About Capital One
Headquartered in McLean, Virginia, Capital One Financial Corporation (www.capitalone.com) is a financial holding company, with 732 locations in New York, New Jersey, Connecticut, Texas and Louisiana. Its principal subsidiaries, Capital One Bank, Capital One Auto Finance, Inc., and Capital One, N.A., offer a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One's subsidiaries collectively had $83.3 billion in deposits and $146.4 billion in managed loans outstanding as of September 30, 2007. Capital One, a Fortune 500 company, trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.
About NetSpend Corporation
NetSpend Corporation is one of the premier providers of innovative, accessible prepaid debit cards that enable financial freedom for under-banked consumers. Grounded by a mission of financial empowerment, NetSpend is committed to meeting its customers' financial services needs on their terms while offering the convenience, security and acceptance of conventional financial services. NetSpend's proprietary processing platform allows it to support prepaid card programs end-to-end from customer acquisition and card fulfillment to customer service and risk management. The NetSpend(R) Prepaid Card Network includes leading consumer brands and companies serving the un-banked and under-banked markets, and its strategic relationships include card issuers, EFT networks and payment card associations. For more information, visit www.netspend.com
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SOURCE: Capital One Financial Corporation