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Fiserv to purchase CheckFree

August 03, 2007|From the Associated Press

ATLANTA — Fiserv Inc., a provider of information management systems and services, is buying online banking company CheckFree Corp. for about $4.2 billion in cash, the companies said Thursday.

Officials said there would be cost savings from combining the companies, which serve banks and other financial institutions, but they did not say how many, if any, jobs would be shed.

The companies employ a total of 27,000 people.

"Between now and the time we close, we'll be working diligently to come to those right answers," Fiserv Chief Executive Jeffery Yabuki said during a conference call with analysts and investors when asked for specifics about the synergies from the deal.

On an annualized basis, Fiserv said it expected more than $100 million in cost savings and more than $125 million in extra revenue as a result of the deal.

For 2008, the acquisition is expected to add to Fiserv's underlying cash earnings per share, the company said.

The deal, set to close by year-end, is worth $4.22 billion based on the purchase price of $48 a share and the 87.9 million CheckFree shares outstanding as of April 30.

The combined company would have revenue of about $6 billion.

CheckFree shares rose $8.57, or 23%, to $45.40 on Thursday. Shares of Brookfield, Wis.-based Fiserv climbed 3 cents to $49.50.

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