MILWAUKEE, Oct. 3, 2005 â Metavante Corporation, the financial technology subsidiary of Marshall & Ilsley Corporation (NYSE:MI), today announced the signing of a definitive merger agreement to acquire LINK2GOV Corp. of Nashville, Tenn. The company will continue to operate under the name of LINK2GOV, and will become a subsidiary of Metavante Corporation, with existing management continuing in their positions.
Terms of the transaction were not disclosed. The acquisition is expected to close in the fourth quarter, pending regulatory approval and other customary closing conditions. The purchase is not expected to have a material impact on the financial results of Metavante or M&I.
LINK2GOV is a successful provider of comprehensive, customized online phone and point-of-sale payment processing services, including credit and debit solutions, to many federal, state and local governments and financial intermediaries servicing government entities, including the Internal Revenue Service.
The acquisition of LINK2GOV expands Metavanteâs presence in consumer payments into government services and continues an established strategy to seek opportunities in vertical markets that have specialized processing requirements for consumer-directed payments.
"LINK2GOVâs strong market reach and record of success in creating and managing consumer payments for government services expands Metavanteâs presence in this vertical market," said Frank R. Martire, Metavante president and chief executive officer. "As government entities work toward providing the convenient payment options consumers seek, Metavante looks to become a successful participant in this growing segment," he added.
In a March 2005 article in the American Banker, "the IRS reported 800,000 taxpayers paid through electronic funds withdrawal last year, or 24% more than in 2003." The agency also reported that "payment to the IRS by credit card rose 70%, to 950,000, in 2004, the first year credit card payments outnumbered electronic funds withdrawal."
Forrester analyst Alan E. Webber stated in a May 2005 report, "More than 60% of Americans, or 62.1 million filers, submitted their 2004 tax returns electronically," adding that the IRS expects that number to grow 8% annually through 2010. 2,3
"LINK2GOVâs established merchant relationships augment our existing merchant acquiring business, and its successful co-branded relationships, including American Express, MasterCard and Visa, complement and leverage our NYCE payment network," said Frank DâAngelo, president and chief operating officer, Metavante Payment Solutions Group. "And LINK2GOVâs ownership of the federal tax payment Web site, PAY1040.com, brings to the Metavante payments solution an additional consumer-branded asset," he said.
According to Edward Braswell, president and CEO of LINK2GOV, "Weâve built an organization capable of providing state-of-the-art payments networks, and to quickly bring that technology into other consumer payment markets. That has given us the ability to not only process government payments, but has led us into other, consumer-driven convenience payments markets, like health care and telecom."