News

Fiserv to pay $218M for EDS' credit union group

July 13, 2003

BROOKFIELD, Wis., and PLANO, Texas -- Fiserv, Inc. (Nasdaq: FISV) says it will acquire the EDS Credit Union Industry Group (CUIG) from Electronic Data Systems Corp. (NYSE: EDS) for $218 million in cash. EDS also will retain $12 million in CUIG receivables.

According to a news release, the acquisition already has received regulatory approval and is expected to close in the near future.

The Credit Union Industry Group specializes in core processing and provides a variety of other products and services, including debit card and transaction processing, electronic banking and lending, and online bill payment and presentment services. The business supports about 1,000 credit unions and generates approximately $115 million in annualized processing and services revenues.

"With this acquisition, we continue to enhance our servicing capabilities and processing expertise within the credit union industry," said Leslie M. Muma, Fiserv president and chief executive, in the release.

CUIG employs 450 people, primarily in Plano, Texas; Huntersville, N.C.; Phoenix, Ariz.; Madison, Wis.; Orlando, Fla.; Auburn Hills, Mich.; San Antonio, Texas; and St. Louis.  Employees of the unit will become Fiserv employees after a transition period, according to the release.

According to an earlier release, Fiserv expects to provide core processing services for about 34 percent of credit unions that outsource their processing operations following the EDS acquisition. (See related story Fiserv in negotiations to buy EDS' credit union business)

Fiserv in November purchased the Consumer Network Services of EDS, which processes more than 2.4 billion EFT transactions annually and drives 13,170 ATMs, for $320 million in cash. That acquisition made Fiserv the second largest third-party processor of EFT transactions in the U.S., with 4,000 clients (direct and indirect).

EDS said the sales are part of its effort, announced in 2002, to divest certain non-core, non-strategic assets.  Upon closing of the CUIG sale, EDS will have raised approximately $544 million in cash under its divestiture program, excluding retained receivables.

(See related stories Fiserv to buy EDS' CNS unit for $320 million cash and Recent purchase boosts Fiserv's ranking among EFT processors)