BROOKFIELD, Wis. & PLANO, Texas -- Fiserv, Inc. (Nasdaq: FISV) and EDS Corp. (NYSE: EDS) today announced a definitive agreement under which it will acquire EDS' Consumer Network Services (CNS) unit for approximately $320 million in cash.
CNS is one of the nation's largest electronic funds transfer (EFT) transaction processors and ATM operators.
According to a release, the deal -- which could bring as much as $160 million in processing and services revenues to Fiserv in 2003 -- is expected to close by the end of the year, pending regulatory review.
"CNS will add a significant dimension to Fiserv in terms of revenue, clients and financial technology services," said Leslie M. Muma, president and chief executive officer of Fiserv, Inc. "With the addition of CNS, we will become one of the nation's leading electronic transaction and payment processors as defined by transaction volume, clients served and ATMs driven."
CNS processes more than 2.4 billion EFT transactions annually and operates 13,170 ATMs. On completion of this agreement, Fiserv will process approximately 4 billion electronic, ATM and POS transactions annually. The combined organization, supported by more than 850 employees, will be one of the top five processors of EFT services in the financial industry. Fiserv will continue to provide EFT services to the financial institution clients of EDS.
"Fiserv's EFT operations fully complement those of CNS," said Coley Clark, president, EDS Financial Global Industry Solutions. "While profitable, CNS is not core to EDS' long-term growth strategy. EDS will continue to serve its financial services clients and remain focused on developing opportunities in IT and business process outsourcing, and business transformation services, our market strengths."
Clark said that some 16 percent of EDS' annual revenue is generated by its work for financial services firms.
EDS said the transaction will not change its previously stated earnings guidance for full-year 2002. EDS also said the divestiture will reduce its 2003 earnings by less than 2 cents per share.
