Metavante Closes NYCE Deal As NYCE Chief Lynch Leaves

Metavante Corp. announced today it has closed its $610-million acquisition of the NYCE electronic funds transfer network. It also announced that Dennis F. Lynch, who has been president and chief executive of Montvale, N.J.-based NYCE since 1996, is leaving the network and will be replaced by Steven A. Rathgaber, currently executive vice president and chief operating officer. Rathgaber takes over effective Sept. 1 as president and chief operating officer. Metavante announced in May it had reached an agreement with First Data Corp. to acquire FDC's 64% interest in NYCE, which is the nation's second-largest EFT system. The remaining shares were held by the banks participating in NYCE, principally Citigroup Inc., Bank of America Corp., HSBC USA Inc., and J.P. Morgan Chase & Co. These banks retained the right to launch a bid of their own for the network, but last month agreed to the acquisition by Metavante. NYCE now becomes a wholly owned subsidiary of the Brown Deer, Wis.-based processor, which itself is a subsidiary of Milwaukee-based Marshall & Illsley Bank. NYCE processes 1.4 billion transactions a year on ATMs and point-of-sale terminals accepting debit cards secured with personal identification numbers, a number exceeded only by the Star System network, which FDC acquired in February as part of its merger with Concord EFS Inc. NYCE hands Metavante a huge stake in the rapidly expanding market for PIN debit transactions, which is growing at a better than 20% rate annually at the point of sale. Metavante also increases the number of automated teller machines it drives from 9,000 to 20,000. Rathgaber has been chief operating officer at NYCE for seven years. He joined the network in 1991 and oversaw the creation of its operations center.