Fexco lands £50m from First Data investment

 

One of the world's largest e-commerce and payment services companies has bought 25 per cent of Fexco in a deal estimated to be worth £50 million (€63.4 million).

Under the deal with First Data Corporation, which will be completed in January, existing shareholders will dilute their holdings by 25 per cent. Mr Brian McCarthy, chairman of Fexco, will no longer be the controlling shareholder of the company.

The 3 per cent share of the company held by staff will not be diluted.

Fexco is one of the State's largest financial services companies, employing more than 800 people at corporate headquarters in Killorglin, Co Kerry.

The company provides a range of services, including multi-currency credit card processing, tax reclaim, international payments, tourism services, prize bond management and stockbroking.

Fexco has been a partner with First Data in Europe since 1994 through the provision of Western Union services in several European markets. The alliance with First Data will create further jobs within Fexco's Kerry operations in the coming year. Expansion is taking place in a new centre in Caherciveen, where up to 100 people could be employed. First Data's principal business areas are payment instruments (mainly the global Western Union network), card issuer services and merchant processor services. The company is listed on the New York Stock Exchange.

The alliance with First Data will enable Fexco to access new merchant and bank customers through First Data's global distribution system, which includes 1,400 financial institution clients and 2 million merchant locations. Fexco employees holding shares under the company's approved profit sharing scheme will benefit directly from the First Data investment.

The First Data deal comes after a difficult spell for Fexco over the past 15 months. The company was subject to three investigations earlier this year, following allegations made by a former employee at an Employment Appeals Tribunal hearing.

The firm was accused of issuing bogus invoices when claiming Enterprise Ireland grants and of making false returns to the Central Bank.

A spokeswoman for the company said there were no outstanding matters with the Revenue Commissioners or with Enterprise Ireland. At the beginning of 2000, Fexco's stockbroking operation had to close to new business indefinitely to allow systems and staff numbers to be upgraded to handle the volume of business the firm had taken on.