Amid suspicion that U.S. Bancorp was saving up for an acquisition spree, the Minneapolis-based bank made its first acquisition of the year on Tuesday.
Elavon, a subsidiary of U.S. Bancorp that processes credit card transactions, has purchased Electronic Transaction Systems (ETS) and plans to merge the two business’s payment processing systems.
Financial terms of the deal were not disclosed, nor any announcements regarding staff changes. Elavon is headquartered out of Atlanta, while ETS is based in Virginia.
“The acquisition of ETS is part of our investment aimed at enhancing Elavon’s eCommerce offering and integrating Elavon’s payments capabilities into software its customers already use,” said Terrance Dolan, vice chairman and CEO of U.S. Bank, in a statement.
U.S. Bank and ETS for the last two decades have been working together, ETS CEO Ed Vaughan added. “There was simply no better choice than U.S. Bank,” he said, “who knows us and shares our vision for the future.”
It has been suspected that U.S. Bancorp would consider acquisitions as a way to drive growth. Despite having cash on hand, the bank had been blocked temporarily by the U.S. Securities Exchange Commission from acquiring other bank holding companies. The government body claimed U.S. Bancorp had failed to set up proper anti-money laundering practices that allowed a number of fraud schemes take place under its nose.
Those claims were settled in February with U.S. Bancorp agreeing to pay several fines totaling $613 million.
While it’s expected to take two years for U.S. Bancorp to pay off those penalties, Evalon’s CEO Jamie Walker expects it won’t take long for ETS to fold into the company’s banking system. “ETS is a successful, dynamic company,” Walker said in a statement, “and we look forward to growing our business together.”