ST. PAUL, MINN. -- Deluxe Corporation is combining its information and payment protection businesses to form eFunds Corporation.
"In the past three years, we have focused on building the financial strength of this company and have now come to the point where we can use our strong balance sheet and significant cash generation not only to invest in a new business model designed to generate revenue growth but also to repurchase up to 13 percent of our outstanding shares," said Deluxe chairman and CEO J.A. Blanchard.
eFunds will combine five existing businesses under single management: Deluxe Electronic Payment Systems, a third-party processor for EFT payments; Debit Bureau, a decision support capability Deluxe announced last year; Chex Systems, Inc., an applicant verification network for financial services companies; SCAN, a check authorization network serving retailers; and Deluxe's recently purchased electronic check conversion business, which converts paper checks into electronic transactions at the point of sale.
"We believe the combination of these five businesses into a single integrated unit provides opportunities for revenue and profit growth that are significantly greater than if we continued their independent operation," Blanchard said. "These market segments are converging rapidly as electronic commerce in its many forms spreads across the U.S. financial services and retail industries."
In 1998, the combined revenues of the businesses that now make up eFunds were more than $225 million. eFunds will be involved in nearly 10 billion payment transactions a year and will have ties to 78,000 financial services company locations, 77,000 retail outlets and thousands of ATMs.
Besides creating eFunds, the company plans to: form a holding company; purchase the remaining 50 percent of HCL-Deluxe, an India-based joint venture; sell National Revenue Corporation, a collections business; and implement a stock repurchase program for up to 10 million shares.
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