Vantiv, Inc. announced an agreement to acquire Mercury Payment Systems, LLC for an aggregate price of $1.65 billion. Mercury is a payment technology and service leader whose solutions are embedded into point-of-sale software applications and brought to market through their dealer and developer partners. Mercury is currently majority-owned by Silver Lake, a global leader in technology investing.
FIS banking and payments technology âDutch auctionâ tender offer for the purchase of up to $2.5 billion of shares of 171,705,905 shares of its common stock were properly tendered and not withdrawn in the tender offer at a price of $29.00 per share. Additionally, 49,528,300 shares were tendered through notice of guaranteed delivery at such prices. Due to the tender offer being oversubscribed, FIS expects to purchase only a prorated portion of the shares properly tendered by each tendering stockholder at or below the final per share purchase price. FIS expects to purchase approximately 86,206,896 shares of its common stock at a purchase price of $29.00 per share, for a total cost of approximately $2,500,000,000.
London-based Apax Partners, a major investor in financial services and media, has signed a deal to purchase Bankrate for about $571 million in cash. The Bankrate network of companies includes Bankrate.com, Interest.com, Mortgage-calc.com, Nationwide Card Services, Savingforcollege.com, Fee Disclosure, InsureMe, CreditCardGuide.com and Bankaholic.com. Recent investments by the Apax Partners Media and Financial & Business Services division include: Trader Media, EMap, Cengage Learning, Travelex, Hub International, Global Refund and Azimut. Separately, Bankrate reported preliminary second quarter results which show that total revenue for the second quarter fell 23% year-on-year to $31 million. Net income is expected to be $1.9 million, compared to $4.1 million for 2Q/08. As of yesterday the Apax deal represented a premium of 15.8% over Tuesday’s closing stock price and 18.2% over the average closing price for the previous ten trading days.
Bank of America and First Data confirm plans to form a new company to offer a comprehensive suite of payments solutions including credit, debit and prepaid cards to merchant loyalty, check and eCommerce payments. Banc of America Merchant Services, LLC will be 46.5% owned by Bank of America and 48.5% by First Data, with the remaining stake held by Rockmount Investments. BofA will contribute approximately 240,000 merchant relationships and FDC will contribute approximately 140,000 merchant relationships to the new company. Following a transition period, FDC will provide the merchant processing and related services. Thomas Bell, chief strategy officer and president of First Data’s financial services business, was named chief executive officer of Banc of America Merchant Services. The combined entity will process over one billion transactions per month. Both firms said they will provide more details in July.
Fidelity National Information Services has completed a deal to acquire Metavante Technologies for $2.94 billion. FIS is a provider of core and transaction processing services, card issuer solutions and outsourcing services to more than 14,000 financial institutions worldwide. Metavante is a provider of banking and payments technologies to approximately 8,000 financial services firms and businesses. The two companies serve complementary customer bases and have highly diversified and recurring revenue streams. In 2008, the companies generated pro forma combined revenue of $5.2 billion. William Foley, chairman of FIS. will serve as chairman of the combined company. Lee Kennedy, FIS president and CEO will serve as executive vice chairman of the board with responsibility for integrating the two companies. Frank Martire, Metavante’s current chairman and CEO will become president and CEO of FIS.
Wells Fargo will merge with Wachovia and acquire all outstanding shares of common stock of Wachovia in a stock-for-stock transaction. Under terms of the agreement, which has been approved unanimously by the
boards of both companies, Wachovia shareholders will receive 0.1991
shares of Wells Fargo common stock in exchange for each share of
Wachovia common stock. The transaction, based on Wells Fargo’s closing
stock price of $35.16 on October 2, 2008, is valued at $7.00 per
Wachovia common share for a total transaction value of approximately
$15.1 billion. Wachovia has almost 2.2 billion common shares
outstanding. The agreement requires the approval of Wachovia
shareholders and customary approvals of regulators. Wells Fargo will record Wachovia’s credit-impaired assets at fair value.
The acquisition is expected to exceed Wells Fargo’s internal rate of
return goal and add to Wells Fargo’s earnings per share in the first
year of operations, excluding integration costs, write-downs,
transaction charges, and credit reserve build. Wells Fargo expects to
incur merger and integration charges of approximately $10 billion. To
maintain its strong capital position, Wells Fargo intends to issue up to
$20 billion of new Wells Fargo securities, primarily common stock.
WI-based Fiserv has closed its deal to acquire CheckFree for about $4.4 billion. More than 3,000 financial services Web sites use the electronic billing and payment services provided by CheckFree. Fiserv has about 18,000 clients. Jeffrey Yabuki will continue to serve as CEO and President of Fiserv and Donald Dillon will continue to serve as Chairman of the Board. Tom Hirsch will continue as the company’s CFO and Pete Kight, former CheckFree Chairman and CEO, will be named Vice Chairman of Fiserv and will lead new product development and strategic integration. Additionally, Kight will join its Board of Directors. Steve Olsen, former COO of CheckFree, will become Fiserv’s Group President of Internet Banking and Electronic Payments. Olsen will lead the company’s bill payments, Internet banking, treasury/cash management and investment management businesses. Separately, Fiserv announced that one of its founders, Norm Balthasar, Fiserv Senior Executive VP and COO, will officially retire on December 31st after 33 years with the company and its predecessor.
WI-based Fiserv has agreed to acquire CheckFree in an all-cash transaction valued at about $4.4 billion. 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 has annual revenues of about $970 million. Fiserv currently serves almost 6,000 core processing clients and all top 100 banks in the U.S. Fiserv says the deal will tightly integrate electronic bill payment and settlement capabilities with its core account processing and risk management solutions to create a unique value proposition unrivaled in the marketplace today. Pete Kight, CheckFree Chairman and CEO will be employed by Fiserv and appointed to its board of directors. Fiserv expects to realize more than $100 million in annualized cost savings and more than $125 million in annualized revenue synergies. The transaction is expected to close by the end of the year.
Ceridian, which includes major payment processor Comdata, is coming under fire from its largest shareholder over its $5.3 billion merger with Thomas H. Lee Partners and Fidelity National Financial. Pershing Square Capital Management says the deal isn’t valued fully and the company should be split up. Pershing, which holds nearly a nearly 15% stake in Ceridian, has hired Lazard Freres and Sullivan & Cromwell to explore alternatives. The activist hedge fund, managed by Bill Ackman, says it may also extend its long feud with Ceridian’s management while it continues its proxy contest. Ceridian says within the next several days it expects to file its proxy statement, which will contain more information about the Board’s process and review of strategic alternatives. Ceridian also says its Board welcomes involvement by shareholders and is prepared to review any proposals that might result in a superior proposal per the merger agreement. The Board says it remains committed to its goal of maximizing shareholder value through its review of all alternatives. Ceridian’s Comdata division is a processor and issuer of credit, debit and stored value cards, primarily for the trucking and retail industries in the USA. (CF Library 5/31/07)
Ceridian, which includes major payment processor Comdata, is going private following a merger deal with Thomas H. Lee Partners and Fidelity National Financial. The all cash transaction is valued at $5.3 billion. The deal represents a premium of 17% over Ceridian’s closing share price on February 12th, the last trading day prior to the public announcement that Ceridian had commenced the exploration of strategic alternatives. THL Partners and FNF expect to bring co-investors into the transaction. Ceridian is a major provider of human resources serving 25 million employees and 110,000 companies in 38 countries worldwide. Ceridian’s Comdata division is a processor and issuer of credit, debit and stored value cards, primarily for the trucking and retail industries in the USA. The deal is expected to close in the fourth quarter.
AL-based Compass Bancshares has signed a definitive agreement under which Banco Bilbao Vizcaya Argentaria will acquire Compass for a combination of cash and stock for $9.6 billion. Compass, the 36th largest U.S. bank credit card issuer, has about $550 million in credit card outstandings at year-end 2006. According to CardData (www.carddata.com), Compass has about 330,000 bank credit card accounts with 160,000 active customers. At the end of 2006, Compass had nearly 340,000 cardholders. BBVA, which operates in 35 countries, is based in Spain and has substantial banking interests in the Americas. Upon completion of the transaction, Compass will rank among the top 25 banks in the U.S. with approximately $47 billion in total assets, $32 billion in total loans and $33 billion in total deposits.
Capital One is furthering its expansion into traditional banking with a deal to acquire North Fork Bancorporation for $14.6 billion. The nation’s fifth largest bank credit card issuer will become one of the 10 largest banks in the country. North Fork has deposits of $36.6 billion and 355 branch locations throughout New York, New Jersey and Connecticut. It is the third-largest depository institution in the greater New York region. Last year, Capital One purchased New Orleans-based Hibernia for $5 billion. After the North Fork deal, the combined company will have deposits of more than $84 billion, a managed loan portfolio of more than $143 billion, more than 50 million customer accounts and 655 branches. Capital One ended 2005 with $49.5 billion in U.S. credit card outstandings and $73.7 billion in annual purchase volume, according to CardData ([www.carddata.com]).