NetSpend sold to Capital One for $700 million

**dcimp3** · 8th August 2007, 02:44 AM

AMERICAN-STATESMAN STAFF
Tuesday, August 07, 2007

Austin-based NetSpend, which markets pre-paid debit cards nationally, was sold today to Capital One Financial Corp. for $700 million in cash, one of the highest pries ever paid for a local company.

NetSpend has more than 1.5 million customers and sells the prepaid cards at 15,000 locations, including H-E-B grocery stores. Its target customers include lower-income people who don't have traditional bank accounts but need access to credit.

NetSpend chief executive Richard Savard will continue to run the company and will become a key executive in Capital One's payments business. The company will remain in Austin.

Brothers Roy and Bertrand Sosa founded the privately held company in 1999, originally aiming at teenagers. They shifted their focus to the larger market of Americans who don't have traditional credit, a population estimated at 70 million people.

It received $60 million in backing from Oak Investment Partners and last year announced a major endorsement deal with former Longhorns star quarterback Vince Young.

Capital One, based in McLean, Va., has 725 branches in Texas and four other states.