BROOKFIELD, Wis. - Fiserv Inc. has announced plans to acquire CheckFree Corp. for approximately $4.4 billion.
Fiserv says CheckFree, which provides online banking, electronic payments, and infrastructure and services, offers services that complement Fiserv's existing products and services.
"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, Fiserv's president and chief executive. "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."
According to a news release, Fiserv expects the combined organization to deliver a wider range of offerings for customers and have the ability to more quickly launch new solutions in the market. The company did not say how it planned to use or dissolve the CheckFree brand name.
"Today's announcement puts Fiserv squarely back into the head to head race with Fidelity as they fight to dominate the software and services business for the financial services industry," said Edward Woods, a analyst with Boston-based consultancy Celent LLC. "This mix brings some great opportunities. It will give Fiserv a legitimate foothold in the top-tier banking market with CheckFree's market-leading bill-payment processing capabilities."
Woods said access to top-tier banks is a necessity for Fiserv. "But," he said, "if Fiserv can't pull its story and technology together, it will just look like a holding company, when it could otherwise be the market leader and make a marked impact on the industry."
Fiserv serves almost 6,000 core processing clients and all top 100 banks in the United States. CheckFree's e-commerce business serves 21 of the top 25 financial institutions in the United States and processes more than 1 billion transactions per year.
Pete Kight, CheckFree's chairman and chief executive, 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 after the acquisition is complete, which is expected to before the end of the year.
