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    Heartland Acquires Alliance Data's Merchant Unit

    Purchase will provide card transaction processing for petroleum retailers and c-stores.

    PRINCETON, N.J. -- With its $77.5 acquisition of Alliance Data Systems Corp.'s Network Services unit, Heartland Payment Systems Inc. will provide card transaction processing for petroleum retailers and convenience stores nationwide.

    Digital Transaction News reported that Alliance Data approached the deal in an effort to focus its more profitable loyalty and private-label credit card operations.

    Since its existing portfolio consists of national and large regional convenience-store and gas-station chains, which generate lower margins than the small and mid-sized companies presently under Heartland umbrella, the acquisition is not without risk, the company's president and chief financial officer, Robert H.B. Baldwin, Jr., told Digital Transaction News.

    Last year, Heartland processed $51.9 billion in bank card charge volume. While restaurants generated approximately 39 percent of the volume, the petroleum segment delivered 3 percent. With this acquisition, Heartland expects the restaurant sector to decline to 30 percent, and petroleum sector to rise to 25 percent, the report stated.

    Currently, approximately 1,200 small-to-medium petroleum retailers use Alliance Data's processing system, according to the report.

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