Fiserv Agrees to Acquire CheckFree for $4.4 Billion

Big news from Fiserv (FISV), one of our Buy List stocks.

Fiserv Inc., the manager of check- processing and cash machines for 17,000 companies, agreed to buy CheckFree Corp. for about $4.4 billion, adding software that runs Internet-banking services.
CheckFree shareholders will receive $48 a share, 30 percent more than yesterday’s close, Brookfield, Wisconsin-based Fiserv said today in a statement.
Fiserv’s biggest acquisition gives it CheckFree’s electronic systems for online bill-paying and technology that processes more than 1 billion transactions a year. Fiserv was outbid by Fidelity National Information Services Inc. earlier this year when it tried to buy rival EFunds Corp. for $1.5 billion.
“Electronic banking is increasing at a significant pace,” said Benton Gup, a professor of finance at the University of Alabama. “More financial-services companies are going to offer online banking if they don’t already.”
Shares of Norcross, Georgia-based CheckFree rose $8.73, or 24 percent, to $45.56 at 12:17 p.m. in Nasdaq Stock Market composite trading. Shares of Fiserv gained 7 cents to $49.26.
The combination will allow the company to eliminate about $100 million a year in expenses, Fiserv said in the statement. The sale, which the companies expect to close by the end of the year, will add more than $125 million to revenue. The purchase should add to earnings per share in 2008, Fiserv said.

Posted by on August 2nd, 2007 at 2:22 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.