Credit card processor First Data Corp. said today it will leave the check and money-order business within the next two to three years.
“A strategic review of our Official Check and Money Order operation highlighted the fact that the business is in a declining market and providing unacceptable returns on both assets and equity,” Chairman and Chief Executive Ric Duques said in a statement.
First Data expects to free up between $250 million and $300 million in cash by exiting the business and plans to use the money for acquisitions, buybacks or other corporate purposes. The Greenwood Village-based company said it will serve existing check and money order clients through the end of their contracts, but will not renew expired pacts on a long-term basis.
First Data’s full-year guidance for earnings per share from continuing operations of $1.20 to $1.26 doesn’t take into account winding down the business. The company expects the shift to minimally impact its tax rate in 2007.
First Data Corporation:
