Intuit buys credit card processor
The financial software and services company says it is acquiring Innovative Merchant Solutions, a provider of credit and debit card processing services for small businesses.
The all-cash deal is worth $116 million. Intuit said it expects the buyout of Calabasas, Calif.-based IMS, which had net revenue of about $25 million last year, to contribute to its revenue and profit growth but that the acquisition will not alter its outlook for fiscal 2004. All 110 employees of IMS will be asked to join Intuit.
Mountain View, Calif.-based Intuit has been making gains on the small business front in recent months. The company said Tuesday that, through its merchant account service, it has enlisted 40,000 customers, creating a $9 million business within three years.
"IMS enables us to expand from that base by providing merchants with an enhanced offering, including a broader range of payment options such as PIN debit card processing and swipe terminals," Intuit CEO Steve Bennett said in a statement. "In addition, we'll be able to provide an easy-to-use offering that tightly integrates with (Intuit software) QuickBooks and is backed by service levels that exceed those in the industry today."
Citing research from the Nilson Report, which focuses on consumer payment systems, Intuit said total credit and debit card spending, which in 2001 was approximately worth $1.7 trillion, is likely to grow 9 percent annually through 2005. Nearly 2.7 million small merchants accept credit cards, with an annual growth rate of approximately 8 percent.
The acquisition is expected to close this month.