Fiserv to Acquire CheckFree
August 02 2007 - 8:30AM
Business Wire
Fiserv, Inc. (NASDAQ: FISV), a leading provider of technology
solutions, and CheckFree Corporation, (NASDAQ: CKFR), a leading
provider of financial e-commerce services and products, today
announced that they have entered into a definitive agreement
whereby Fiserv will acquire CheckFree in an all-cash transaction
valued at approximately $4.4 billion. Under terms of the agreement,
CheckFree shareholders will receive $48.00 in cash for each share
of common stock. CheckFree, a leader in online banking, electronic
payments, and infrastructure and services, and Fiserv, a leader in
information management services to the financial and insurance
industries, have complementary technology, services and business
models. Fiserv anticipates the combined organization will deliver a
wider range of product and service offerings for customers, as well
as provide opportunities for improved growth and enhanced
efficiency, including the ability to bring new solutions to market
faster. CheckFree has leading positions in electronic billing and
payment, online banking, investment management technology
solutions, ACH payments and fraud and risk management, among
others. Fiserv currently serves almost 6,000 core processing
clients and all top 100 banks in the U.S. CheckFree�s Electronic
Commerce business serves 21 of the top 25 financial institutions in
the U.S. and processes more than 1 billion transactions per year.
�CheckFree�s industry-leading payment and Internet banking
capabilities will significantly accelerate our strategic
transformation, extending our service platform to the largest
financial institutions,� said Jeffery Yabuki, President and Chief
Executive Officer of Fiserv. �This combination allows us to deliver
the best available solutions to all of our clients to enhance
growth today, and into the future. An important objective of the
transaction is to tightly integrate electronic bill payment and
settlement capabilities with our core account processing and risk
management solutions to create a unique value proposition unrivaled
in the marketplace today.� �By joining our complementary technology
and capabilities with Fiserv and its unparalleled footprint, this
new combined entity will broaden Fiserv�s offerings to customers
worldwide,� said Pete Kight, CheckFree Chairman and Chief Executive
Officer. �In particular, it will significantly accelerate the
delivery of next-generation services to financial institutions and
their customers. CheckFree�s broad range of offerings will also
enable Fiserv to round out its ability to deliver solutions that
address the challenges of an evolving U.S. payments landscape and
help facilitate the growth of the managed accounts industry.� In
conjunction with the closing of the transaction, Kight will be
employed by Fiserv and appointed to its board of directors. �Pete�s
demonstrated results in building one of the world�s leading payment
and transaction processing companies are a testament to his energy,
vision and strategic leadership,� said Donald F. Dillon, Fiserv
Chairman. �We will be thrilled to have him on our board.� Fiserv
expects to realize more than $100 million in annualized cost
savings and more than $125 million in annualized revenue synergies.
For 2008, the transaction is expected to be accretive to Fiserv�s
underlying cash earnings per share. The transaction is expected to
be completed by December 31, 2007, subject to regulatory approvals,
approval by the CheckFree shareholders and customary closing
conditions. After closing, the combined company will have pro-forma
revenue of about $6 billion, employ more than 27,000 associates
world-wide and be the leading provider of technology processing
solutions to banks and financial institutions. �We are impressed by
the people of CheckFree. Their cultural commitment to clients is
consistent with how we do business and this combination will create
significant growth opportunities for all of our people,� said
Yabuki. CheckFree 2007 Preliminary Earnings Per Share CheckFree
announced that, for its fiscal year ended June 30, 2007, it expects
to report GAAP revenue in the range of $970.0 million to $973.0
million, and underlying revenue in the range of $993.0 million to
$996.0 million. CheckFree expects GAAP earnings per share for
fiscal 2007 to be in the range of $1.35 and $1.37, and underlying
earnings per share for fiscal 2007 to be in the range of $1.87 to
$1.89. The difference between CheckFree's expected GAAP and
underlying revenue expectations is due to an $11.0 million charge
for earned customer warrants and approximately $12.0 million in
expected deferred revenue adjustments related to acquisitions. The
difference between GAAP and underlying earnings expectations is due
to expected amortization of acquisition-related intangible assets
of approximately $63.5 million, acquisition-related integration
costs of an estimated $7.0 million, the SFAS 123(R) impact of stock
options issued prior to July 1, 2004 of approximately $1.6 million,
an $11.0 million charge for earned customer warrants, and
approximately $12.0 million in expected deferred revenue
adjustments related to acquisitions, all net of related income tax
benefits of approximately $28.0 million. CheckFree plans to release
its fiscal year 2007 earnings results on August 3, 2007, rather
than August 9, 2007, as previously announced. Fiserv is being
advised by Credit Suisse and Sullivan & Cromwell LLP. CheckFree
is being advised by Goldman, Sachs & Co. and Wachtell, Lipton,
Rosen & Katz. CONFERENCE CALL Fiserv will host a call to
discuss the transaction with investors at 9 a.m. CDT on Aug. 2. To
join the call, dial 888-889-0622, ask for the Fiserv conference
call and provide the operator with the passcode, FISV. To register
for a webcast of the event, go to www.fiserv.com and click on the
link for the event in the �Upcoming Events� Section of the home
page. From there, click �Access Event.� The company will provide
additional information on the anticipated results for the
acquisition and the implications on the company strategy at its
annual investor meeting on October 2, 2007 in New York City. About
CheckFree Founded in 1981, CheckFree Corporation (NASDAQ: CKFR)
provides financial electronic commerce services and products to
organizations around the world. CheckFree Electronic Commerce
solutions enable thousands of financial services providers and
billers to offer the convenience of receiving and paying household
bills online, via phone or in person through retail outlets.
CheckFree Investment Services provides a broad range of investment
management solutions and outsourced services to hundreds of
financial services organizations, which manage about $1.8 trillion
in assets. CheckFree Software develops, markets and supports
payment processing solutions that are used by financial
institutions to process more than two-thirds of the 14 billion
Automated Clearing House transactions in the United States, and
supports reconciliation, exception management, risk management,
transaction process management, corporate actions processing, and
compliance within thousands of organizations worldwide. About
Fiserv Fiserv, Inc. (NASDAQ: FISV), a Fortune 500 company, provides
information management systems and services to the financial and
insurance industries. Leading services include transaction
processing, outsourcing, business process outsourcing (BPO),
software and systems solutions. The company serves more than 18,000
clients worldwide and is the leading provider of core processing
solutions for U.S. banks, credit unions and thrifts. Fiserv was
ranked the largest provider of information technology services to
the financial services industry worldwide in the 2004, 2005 and
2006 FinTech 100 surveys. Headquartered in Brookfield, Wis., Fiserv
reported more than $4.4 billion in total revenue for 2006. For more
information, please visit www.fiserv.com. Cautionary Statement
Regarding Forward-Looking Statements Certain statements in this
release constitute �forward-looking statements.� Actual results
could differ materially from those projected or forecast in the
forward-looking statements. The factors that could cause actual
results to differ materially include the following: the possibility
that the parties may be unable to achieve expected synergies and
operating efficiencies in the merger within the expected
time-frames or at all and to successfully integrate CheckFree�s
operations into those of Fiserv; such integration may be more
difficult, time-consuming or costly than expected; revenues
following the transaction may be lower than expected; operating
costs, customer loss and business disruption (including, without
limitation, difficulties in maintaining relationships with
employees, customers, clients or suppliers) may be greater than
expected following the transaction; the retention of certain key
employees at CheckFree; the occurrence of any event, change or
other circumstances that could give rise to the termination of the
merger agreement; the outcome of any legal proceedings that may be
instituted against Fiserv and others related to the merger
agreement; shareholder approval or other conditions to the
completion of the transaction may not be satisfied, or the
regulatory approvals required for the transaction may not be
obtained on the terms expected or on the anticipated schedule; the
amount of the costs, fees, expenses and charges related to the
merger and the execution of certain financings that will be
obtained to consummate the merger; and the parties� ability to meet
expectations regarding the timing, completion and accounting and
tax treatments of the merger. Fiserv and CheckFree are subject to,
among other matters, changes in customer demand for their products
and services, pricing and other actions by competitors, general
changes in local, regional, national and international economic
conditions and the impact they may have on Fiserv and CheckFree and
their customers and Fiserv�s and CheckFree�s assessment of that
impact; proposed or enacted legislation affecting the financial
services industry as a whole, and/or Fiserv and CheckFree and their
subsidiaries individually or collectively; regulatory supervision
and oversight; rapid technological developments and changes;
Fiserv�s and CheckFree�s ability to continue to introduce
competitive new products and services on a timely, cost-effective
basis; the mix of products/services; containing costs and expenses;
protection and validity of intellectual property rights; the
outcome of pending and future litigation and governmental
proceedings; acts of war and terrorism; and the other factors
discussed in �Risk Factors� in Fiserv�s and CheckFree�s respective
Annual Reports on Form�10-K for the most recently ended fiscal year
and Fiserv�s and CheckFree�s other filings with the SEC, which are
available at http://www.sec.gov. Neither Fiserv nor CheckFree
assume any obligation to update the information in this release.
Readers are cautioned not to place undue reliance on
forward-looking statements which speak only as of the date hereof.
Additional Information and Where to Find It This communication may
be deemed to be solicitation material in respect of the proposed
acquisition of CheckFree by Fiserv. In connection with the proposed
acquisition, Fiserv and CheckFree intend to file relevant materials
with the SEC, including CheckFree�s proxy statement on Schedule
14A. STOCKHOLDERS OF CHECKFREE ARE URGED TO READ ALL RELEVANT
DOCUMENTS FILED WITH THE SEC, INCLUDING CHECKFREE�S PROXY
STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED TRANSACTION. Investors and security holders will be
able to obtain the documents free of charge at the SEC�s web site,
http://www.sec.gov, and CheckFree stockholders will receive
information at an appropriate time on how to obtain
transaction-related documents for free from CheckFree. Such
documents are not currently available. Participants in Solicitation
Fiserv and its directors and executive officers, and CheckFree and
its directors and executive officers, may be deemed to be
participants in the solicitation of proxies from the holders of
CheckFree common stock in respect of the proposed transaction.
Information about the directors and executive officers of Fiserv is
set forth in its proxy statement for its 2007 Annual Meeting of
Shareholders, which was filed with the SEC on April 11, 2007.
Information about the directors and executive officers of CheckFree
is set forth in its proxy statement for its 2006 Annual Meeting of
Stockholders, which was filed with the SEC on September 26, 2006.
Investors may obtain additional information regarding the interest
of such participants by reading the proxy statement regarding the
acquisition when it becomes available. FISV-G
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