Press Releases

Euronet acquires processor of mobile phone top-ups in Spain

November 4, 2004 at 12:00 AM EST
Euronet acquires processor of mobile phone top-ups in Spain

LEAWOOD, KANSAS—Nov. 4, 2004—Euronet Worldwide, Inc. (Nasdaq: EEFT), a leading electronic payments provider, today announced the closing of an asset acquisition of the Movilcarga Division of Grupo Meflur Corporacion (Meflur), a Spanish telecommunications distribution company. Euronet will own 80% of Movilcarga and Meflur will own the remaining 20%.

Movilcarga is a provider of electronic prepaid voucher solutions in Spain. Movilcarga has a distribution agreement with Telefonica, the largest mobile operator in Spain, which services 52% of that country's mobile telecommunications market. The company plans to expand its top-up services with additional mobile operators in Spain.

Meflur is one of the largest European wholesalers of telecommunication services and products, and one of the largest independent wholesalers and distributors in Spain. Meflur, with headquarters in Monzón (Huesca) in Northern Spain, was successful in leveraging its mobile operator relationships together with its other distribution businesses to develop the mobile phone top-up business. Meflur will retain 20% of its interest in Movilcarga and actively participate in the continued growth and development of Movilcarga. From its creation in 1996, Meflur has grown rapidly and has branched out from its activity in Spain to certain Latin American markets.

"Spain was one of the first European countries to embrace electronic top-up and Movilcarga is one of the leaders of that industry," said Michael J. Brown, Euronet chairman and CEO. "This acquisition enables Euronet to establish a strong presence in Spain, Europe's fourth largest prepaid market. Another exciting aspect of this acquisition is the opportunity to leverage the Telefonica relationship throughout the Latin American markets."

In 2004, according to Movilcarga's unaudited financial information, the top-up business has experienced transaction growth of approximately 8% percent per quarter. Based on its most recent three-months' unaudited financial information, Movilcarga generated net revenue, on a recognition basis consistent with Euronet's other prepaid processing revenues, of approximately $3.5 million.

Under the Movilcarga acquisition agreement, Euronet will hold 80% of the shares of an acquisition entity that is purchasing the Movilcarga assets for €18.0 million (approximately $22.9 million) in two installments: €8.0 million in cash at closing and €10.0 million in cash to be paid in March 2005, subject to certain revenue targets and adjustments. An additional payment may be due on November 4, 2006, subject to the fulfillment of certain financial conditions. The additional payment, if any, is payable, at the option of Euronet, either in cash or a combination of cash and common stock of Euronet. All of Movilcarga's employees will be retained to continue operations, sales, development and customer service activities in Spain.

Movilcarga is one of several relatively similar sized top-up providers in Spain. Spain, with a population of 40 million, is the fourth largest prepaid market in Europe. According to mobile operator data and EMC, a leading research group, approximately 55% percent of the 37 million mobile phone subscribers use prepaid services.

"Electronic prepaid services gained popularity and have quickly started permeating around the globe, and Meflur was already moving to distribute its prepaid technology internationally," said Bernabé Noya, Meflur CEO. "This acquisition was a way to expedite the international expansion. We are excited to become an integral part of the world's largest prepaid provider."

Euronet expects that Movilcarga will contribute approximately $0.05 per share to its fully diluted earnings per share for the year 2005. This estimate is subject to refinement, if any, resulting from purchase price allocation and the related amortization, and it is based on current and projected financial performance of Movilcarga, as determined from financial information provided in the transaction.

About Euronet Worldwide

Euronet Worldwide is an industry leader in processing secure electronic financial transactions. The company offers outsourcing and consulting services, integrated EFT software, network gateways, and electronic prepaid top-up services to financial institutions, mobile operators and retailers. Euronet operates and services the largest pan-European group of ATMs and operates the largest India shared ATM network. Euronet is also the largest provider of prepaid processing, or top-up services, for prepaid mobile airtime. The company has processing centers located in the U.S., Europe and Asia, and processes electronic top-up transactions at more than 168,000 point-of-sale terminals across more than 79,000 retailers in Europe, Asia Pacific and the U.S. With corporate headquarters in Leawood, Kansas, USA, and 17 worldwide offices, Euronet serves clients in more than 65 countries. Visit the company's web site at

Any statements contained in this news release, which concern the company's or management's intentions, expectations, or predictions of future performance, are forward-looking statements. Euronet's actual results may vary materially from those anticipated in such forward-looking statements as a result of a number of factors, including: technological developments affecting the market for the company's products and services; foreign exchange fluctuations; and changes in laws and regulations affecting the company's business. These risks and other risks are described in the company's periodic filings with the Securities and Exchange Commission, including but not limited to Euronet's Form 10-Qs for the periods ended March 31, 2004 and June 30, 2004 and its 10-K for the period ended December 31, 2003. Copies of these filings may be obtained by contacting the company or the SEC.