The Green Sheet Online Edition
September 9, 2009 • 09:09:02
FIS acquisition of Metavante approved
The acquisition of Metavante Technologies Inc. by Fidelity National Information Services Inc. (FIS) appears all but finalized after the two companies received both clearance from the United States Department of Justice and approval from their respective shareholders in early September 2009.
The acquisition, which will make Metavante a subsidiary of FIS, was disclosed in April 2009. Under the agreement, shareholders will receive 1.35 shares of FIS common stock for each share of Metavante common stock they own, and Metavante will assume the FIS name. In 2008, the companies generated an estimated combined revenue of $5.2 billion.
Large acquisitions
"Fidelity has grown in large part due to its large acquisitions," said Keith Briscoe, President of Toronto-based marketing consultancy Brisk Marketing. Briscoe worked previously as the Director of U.S. Marketing for eFunds, a payment processing and consulting firm that was bought by FIS in 2007.
"This really does leave a very short list of major payment processors within the North American space and probably globally as well," Briscoe said.
Briscoe said FIS and Metavante would dovetail - that their strengths were "complimentary and not redundant." FIS said the merger will result in cost synergies (the cost savings that result when companies of complimenting strengths join together) of around $260 million.
"The combined scale, complementary product capabilities and market breadth of these two great companies will drive significant competitive advantages," said William P. Foley II, Chairman of FIS. "This transaction will further strengthen FIS' competitive position as a leading provider of technology solutions and enable us to generate increased value for shareholders and customers."
FIS is a global processor, headquartered in Jacksonville, Fla., that serves more than 14,000 financial institutions. Metavante Technologies, headquartered in Milwaukee, is the parent company of Metavante Corp., which provides banking and payment processing technologies to approximately 8,000 financial services businesses worldwide.
"It's pretty unsurprising that Fidelity would want to acquire Metavante since they're likely looking to increase their role in the credit processing sphere," Briscoe said.
"Metavante has a strong foothold on the credit processing side, and it's probably a strategic move in the direction of being more internationally competitive. For Fidelity it's all about expanding the range of their portfolio and depth of their client base." Representatives of both companies told The Green Sheet an official announcement of the deal is slated for Oct. 1, 2009.
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