In a significant strategic move American
Express (Amex) has acquired Corporate Payment Services (CPS), the
corporate card corporate purchasing business of GE Money, a unit of
US conglomerate General Electric (GE), in a $1.1 billion cash
deal.
Express (Amex) has acquired Corporate Payment Services (CPS), the
corporate card corporate purchasing business of GE Money, a unit of
US conglomerate General Electric (GE), in a $1.1 billion cash
deal.
For Amex the acquisition is line with its
strategy to focus on the payments sector and follows the completion
of the sale of its international banking subsidiary, American
Express International Deposit Company, to UK bank Standard
Chartered in February 2008 for $823 million.
strategy to focus on the payments sector and follows the completion
of the sale of its international banking subsidiary, American
Express International Deposit Company, to UK bank Standard
Chartered in February 2008 for $823 million.
“Expanding our corporate purchasing and expense
management services is a top priority for American Express,” said
Anré Williams, president of Amex’s Global Commercial Card and
Services unit. “Acquiring Corporate Payment Services adds to our
purchasing card capabilities and gives us the opportunity to
accelerate our growth. In addition, Corporate Payment services also
has excellent credit metrics and a premium client base.”
management services is a top priority for American Express,” said
Anré Williams, president of Amex’s Global Commercial Card and
Services unit. “Acquiring Corporate Payment Services adds to our
purchasing card capabilities and gives us the opportunity to
accelerate our growth. In addition, Corporate Payment services also
has excellent credit metrics and a premium client base.”
CPS’ products are similar to those offered by
American Express’ commercial card business, which handles the
travel, entertainment and purchasing spending by employees of
large- and mid-sized companies. Accounts are typically paid in full
at the end of each month, rather than through a revolving credit
account.
American Express’ commercial card business, which handles the
travel, entertainment and purchasing spending by employees of
large- and mid-sized companies. Accounts are typically paid in full
at the end of each month, rather than through a revolving credit
account.
As part of the deal Amex also acquired GE’s
patented vPayment technology platform, which provides unique
account numbers for each transaction that expire once the purchase
has been authorised.
patented vPayment technology platform, which provides unique
account numbers for each transaction that expire once the purchase
has been authorised.
CPS was originally established in 1992 to issue
GE’s corporate travel and entertainment cards and purchasing cards
to GE employees and was subsequently expanded to serve more than
300 large corporate clients.
GE’s corporate travel and entertainment cards and purchasing cards
to GE employees and was subsequently expanded to serve more than
300 large corporate clients.
In 2007 CPS generated more than $14 billion in
global purchase volume and maintained $1.1 billion in receivables
at the end of the year. CPS’ billed business recorded a CAGR of 18
between 2002 and 2007.
global purchase volume and maintained $1.1 billion in receivables
at the end of the year. CPS’ billed business recorded a CAGR of 18
between 2002 and 2007.
Reflecting divergent strategic objectives of
the two companies, GE Money’s president and CEO Mark Begor said
that despite CPS having been a “terrific GE growth story”, the
transaction met GE’s strategy of redeploying assets in financial
services. GE will continue to be CPS’ largest single client and has
signed a multi-year agreement to become a client of Amex.
the two companies, GE Money’s president and CEO Mark Begor said
that despite CPS having been a “terrific GE growth story”, the
transaction met GE’s strategy of redeploying assets in financial
services. GE will continue to be CPS’ largest single client and has
signed a multi-year agreement to become a client of Amex.
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