Fiserv to buy CheckFree for $4.2 billion
Both companies offer services to banks and other financial firms.
ATLANTA - Fiserv Inc., a provider of information-management systems and services, is buying online banking company CheckFree Corp. for about $4.2 billion in cash, the companies said yesterday.
Officials said there would be cost savings from combining the two companies, which serve banks and other financial institutions. The companies did not say how many, if any, jobs would be lost.
Together, they employ 27,000 people.
Fiserv said it expected to realize more than $100 million in annual cost savings and more than $125 million in extra revenue as a result of the deal.
The acquisition, set to close by the end of the year, is worth $4.22 billion based on the purchase price of $48 a share and the 87.9 million CheckFree shares outstanding as of April 30. The two sides value the deal at $4.4 billion, which includes an unspecified amount of debt, according to a spokeswoman.
The combined company will have revenue of about $6 billion.
The $48-a-share offer for CheckFree is a 30 percent premium over its Wednesday closing price of $36.83.
CheckFree shares rose $8.57, or 23.3 percent, to close at $45.40. Fiserv shares gained 31 cents and closed at $49.50.
Fiserv, of Brookfield, Wis., serves the financial and insurance industries. It said CheckFree, of Norcross, Ga., had complementary technology, services and business models. CheckFree provides electronic billing and payment, online banking and investment-management technology services, among others.
Fiserv chief executive officer Jeffery Yabuki said a goal of the acquisition was to "tightly integrate electronic bill-payment and settlement capabilities with our core account-processing and risk-management solutions."
He also said the two companies had complementary client bases. Fiserv's core processing base consists of smaller and mid-market banks, credit unions and thrifts. CheckFree serves mostly larger banks.