News

Jack Henry acquiring biometrics firm, closes acquisition of Select Payment Processing

October 7, 2004

MONETT, Mo. - Jack Henry & Associates, Inc. (Nasdaq: JKHY - News), a provider of integrated computer systems and ATM/debit card transaction processing, has acquired California-based Verinex Technologies, a developer and integrator of biometric security solutions.

The terms of the transaction were not disclosed.

According to a news release, Verinex produces a fingerprint authentication solution called Biodentify, which provides intuitive wizard-based registration, single-touch identification, event logging for auditing and regulatory compliance purposes and high usability rates.

"Password use and administration have become increasingly more expensive and inefficient," said Tony Wormington, president of Jack Henry & Associates. "Biometrics eliminates user names and passwords, and the related costs, ongoing administration and management issues, while significantly enhancing security. Integrating Biodentify into our banking and credit union systems can significantly improve our clients' operating efficiencies while enhancing their overall security."

According to the release, consulting firms Gartner Group and IDC estimate that password administration and management costs can total $200 to $300 per user, per year -- not including the cost of compromised proprietary information. According to the companies' research, 20 percent to 50 percent of all help desk calls are requests for password resets; the average labor cost for a single password reset is $38.

Kevin Williams, CFO of Jack Henry & Associates, said the acquisition is expected to contribute approximately $3 to $4 million in EBITDA for the remainder of the 2004 fiscal year.

Jack Henry also has closed the acquisition of privately-held Select Payment Processing, Inc., a deal which was announced Sept. 8. Select Payment Processing provides ACH and electronic check processing solutions for financial institutions, third-party payment processors, government entities, utility companies and online and offline merchants.

The acquisition was pending Select Payment's shareholder approval, which was received Sept. 30.