CO-OP Financial Services has acquired the Des Moines, Iowa-basedpayments processor TMG in a $100 million all-cash deal and hasrestructured its management team, according to an announcementtoday.

The Rancho Cucamonga, Calif.-based CUSO has been a minorityowner in TMG for some time but said Monday that it has purchasedall the remaining shares of TMG from the Iowa Credit Union League.TMG serves approximately 400 credit unions and processestransactions for about six million cardholders across the U.S. andCanada. CO-OP Financial Services has $376 million in assets andserves about 3,500 credit unions, as well as about 60 millionconsumer account holders.

The deal brings the business to nearly $500 million in combinedrevenues, CO-OP President/CEO Todd Clark told CUTimes.

“The combined forces of TMG and CO-OP provide credit unions witha single point of entry to the most innovative, tailored,cost-effective products and services as they prepare for a rapidlytransforming payments landscape,” Clark said in the announcement.“We will offer the market greater integration of the two company'sproduct lines and a simplified, predictive client experience. Wewill also leverage artificial intelligence, custom businessintelligence, consultation and deeper security offerings that marrymachine learning and human analysis to perfect authentication,reporting and anticipation of fraud.”

Clark, who became the CEO of CO-OP last June, said the dealrepresents a major operational pivot for the CUSO.

“We've been talking now for about nine months about beingmore seamless and more secure. Obviously, everything we'redoing here makes us a whole lot more seamless,” Clark said. “Wethink about the back-office operations at our credit unions and howusing two different systems right now is inconvenient to managetheir card bases, and as we bring these things together, it'll allbe under one system and one set of data.”

CO-OP first partnered with TMG about five years ago, Clark said.He said about 60% of TMG credit unions are already part ofCO-OP.

“It's not so much about net new credit unions as much as it'sabout integration of services and performing for the credit unionsin a better way. Today, if you get your ATMs from CO-OP and you do your credit with TMG, it's twodifferent relationship managers, two different salespeople. Goingforward, it'll be a unified product,” he added.

Shazia Manus, who is the CEO of TMG, will become CO-OP's chiefproduct and strategy officer, according to the announcement.

CO-OP said several other executive positions have shifted aswell:

• Jim Hanisch, formerly EVP, network operations and corporatedevelopment, has been appointed COO.
• Kari Wilfong, formerly CFO/EVP, has been elevated to CFO/chiefadministrative officer.
• Mathew Kardell, previously with First Data, joins the companyas chief revenue officer.
• Nick Calcanes, previously with Fiserv, will become chiefinformation officer.
• Samantha Paxson, formerly chief marketing officer, has becomechief experience and marketing officer.
• Jill DeNiro, formerly EVP of human resources, is now chiefpeople officer.
• Paul Love, previously with the Federal Home Loan MortgageCorporation, is now chief information security officer.

“All TMG employees will continue their employment in theirexisting roles. The Des Moines operation continues and for the mostpart it is as of now business as usual,” Manus said. “Obviously aswe look to integrate into the broader organization and look toreally come up with new strategies, we'll look to leverage them asappropriately so the team continues as it is. They're very, veryexcited to become part of the broader CO-OP ecosystem.”

Clark said CO-OP will roll out most of the integration dates atits THINK conference in May.

“I would expect to see, within the next 60 or so days, start tosee us face the market in a slightly different way,” he said.