Posted by Mark Brousseau
Vijay Balakrishnan, president of StratEx LLC (770-598-5747, www.stratexllc.blogspot.com) passes along his insights on the recent acquisition of Goldleaf Financial Solutions by Jack Henry and Associates.
The recent announcement that Jack Henry and Associates (Nasdaq: JKHY) would acquire Goldleaf Financial Solutions, Inc. (Nasdaq: GFSI) is yet another marker in the clear trend towards consolidation in the banking and payment solutions space. While significantly modest in scale and scope than the Fidelity- Metavante merger, it fits the template du jour of core solution providers filling out their payments repertoires, with a particular focus on the check and ACH vehicles.
Goldleaf has grown through acquisitions: Community Banking Systems, Data Trade, Alogent, and the original Goldleaf to name a few. Many of these acquisitions were predominantly debt financed. Low revenue growth, an increasingly difficult EBITDA (earnings before interest, taxes, depreciation and amortization) picture, and the debt load explain Goldleaf's decision to seek an exit through divestiture. At a purchase price of about $19 million (not including the retirement of some $42 million in Goldleaf debt), Jack Henry is getting value for its money, given that Goldleaf had paid $42 million for Alogent alone in January, 2008.
The less than stellar performance of Goldleaf does not vitiate the value of its component business units. Alogent was arguably the pace setter for distributed check capture in the run-up to, and in the couple of years following the passage of Check 21. They are the leaders in teller capture, and have implemented their solution integrated with varied teller systems like Argo, Getronics, Siebel, S1 and other in-house platforms. Their customers include JP Morgan Chase, SunTrust, Key Bank, HSBC, and international names like Lloyds TSB, Barclays Bank and Servipag- all with sizable distributed capture implementations. Less known is Goldleaf's strong presence in ACH solutions for small institutions. "It is the PEP+ for small banks", according to an industry insider, drawing an analogy with Fiserv's dominant big bank PEP+ solution.
The dark cloud in the Goldleaf story is the lack of exploited synergy between the business units. There are product overlaps- multiple merchant capture offerings between Goldleaf, Alogent and Community Banking Systems for example. The component companies appear to operate as independent units without the benefit of a cohesive brand and product strategy. The rationalization of overlapping Goldleaf product lines and those already existing within the Jack Henry family, and the development of a clear and consistent go-to-market strategy would be one of the immediate challenges at Jack Henry's doorstep.While a blog is not the right vehicle to articulate a comprehensive strategy, it is interesting to consider a few possibilities:
... Reducing the overlap in branch, merchant and other distributed capture offerings (both licensed and outsourced) makes eminent sense, from market messaging, cost of development and support perspectives.
... Exploiting the synergies between Goldleaf's strong ACH presence and Jack Henry's significant market share in small institution core processing is another obvious opportunity. Less intuitive perhaps is a possible link between the check and ACH lines of business as the convergence between imaging and ACH conversion plays out.
... It should be a no-brainer to integrate the Goldleaf (Alogent) teller capture solution and strong expertise with Symitar, Core Director and other teller platforms. As previously observed on StratEx Insights, teller capture will increasingly be brought to market bundled with teller platforms.
... The Data Trade division brings Document Management and Remittance Processing capability to the mix. There are multiple converging paradigms at play here. There is obvious synergy between the loan and deposit modules of Jack Henry core systems and document management. Remittance processing is headed in two directions. There is an emerging opportunity for retail "remote remittance" which dovetails nicely with merchant capture. Both "whole-tail" and wholesale remittance processing increasingly have a need for document management, within the ambit of a well thought out Content Management strategy.
... The Alogent part of Goldleaf brings international expertise to Jack Henry with customers in the UK, and Chile. Goldleaf is the dominant player in the UK check market. While it can be argued that the UK check market is declining rapidly, the account presence with leading banks can perhaps be leveraged to introduce other products from within the Jack Henry portfolio to markets beyond U.S. shores.
... While Jack Henry has historically served smaller institutions, Goldleaf (via Alogent) brings a Global 50 customer list. The peaks and valleys of whale-size deals, and the high customization needs of these institutions are radically different from Jack Henry's traditional customer base. With the opportunity to scale these heights comes the challenge of getting one's head around a very different business model.
Lastly, consider this possibility. As I said earlier, it is a no-brainer to integrate the Goldleaf teller capture solution with Jack Henry teller platforms. But what if they went the other way?
Goldleaf's biggest potential competitor in the teller capture market in the top 50 banks is Argo Data Systems, Inc.. Argo enjoys an 80% market share in big bank teller deployments. While Goldleaf has successfully integrated its solution with Argo's teller system in the past, Argo has in the past few years, hired away a team of check processing experts from Metavante to build their own capture solution. It is likely to be increasingly difficult to compete against such a bundled Argo offering. But what if Jack Henry went the other way, scaled up one of its teller platforms, bundled it with Goldleaf's teller capture, and took Argo head on in the top 50 banks?
Now.....that would be a turning leaf worth watching!
Showing posts with label Metavante. Show all posts
Showing posts with label Metavante. Show all posts
Wednesday, September 9, 2009
Tuesday, April 14, 2009
Fidavante-Merger Musings
Posted by Mark Brousseau
Vijay Balakrishnan, president of StratEx, LLC (770-598-5747) passes along the following blog entry with his musings on the recent merger between Fidelity National Information Services and Metavante. For more insights from Balakrishnan, visit his Web site at www.stratexllc.blogspot.com.
In an era characterized by synthesized monikers a la "Brangelina" for famous couples, "Fidavante" is perhaps warranted for the entity to be created by Fidelity National Information Services' acquisition of Metavante. The combination promises to be a powerhouse to rival Metavante's cross-town rival Fiserv. With over 2200 core banking customers and 220 million cards processed, Fidavante's potential operating leverage is nothing short of phenomenal. The road to fruition, however, is dependent on the successful integration of two complex organizations.
At the core. The greatest payoff, arguably, is in the rationalization and rejuvenation of the combined core banking base. As the oft repeated watchword argues, "Core is King!" It is also the most difficult integration challenge ahead. Both companies have large customer bases with legacy systems. The Fidelity repertoire includes customers on systems as disparate as Systematics, Horizon, Mercury and Miser. The Metavante stable includes the Integrated Banking Suite (IBS) platform, as well as the Bankway products that came by way of the Kirchman acquisition- the latter marketed through both outsourced and in-house license models. In addition, Metavante has entered into an agreement with Temenos to produce a next-generation core banking solution for large U.S. banks. The Fidelity equivalent is its Profile product.
There are myriad strategy alternatives. Does it make sense to focus the new technology from either Temenos or Profile on effecting a technology turn within the existing small-to-medium sized institution base? Notwithstanding the daunting number of conversions, it can be argued that this option is easier than the heart surgery of core replacement in a large bank. Or is it better to leave the legacy base as is for now, and use the next-generation platform to go after larger institutions? How does one pick a winner between Temenos and Profile, given the shots across the bow already being fired with the recent statement from Temenos that its agreement with Metavante is binding on post acquisition successor parties? If large banks are the target market, exactly how big is big?
Whale hunting perils. I suggest the foremost prerequisite for success is to get a clearly articulated strategy for each core banking market segment. It can be argued that both companies have a predominantly small-to-medium financial institution footprint. Thus, execution of a strategy for that segment, regardless of what that ends up being, is likely to come naturally to the combined entity. Scaling the heights of large institutions, on the other hand, is a different matter. Selling to, and serving large, whale-like institutions is an art by itself, considering the long selling cycles, significant customization, and the volatility that large deals bring to the P&L lines. That said, there are elements within both companies that have come by way of acquisition that have a large-institution history. The trick will be to identify those skill sets, and allow them to succeed within an operating mileu that has long been used to the relative predictability of smaller institutions.
Switch hitting. The payments side of the business offers major synergies. The NYCE network from Metavante and the debit switching operation from Fidelity's eFunds acquisition are natural fits. The synergies between these two entities stretch back in history to when eFunds was part of Deluxe Corporation. If memory serves me right, Deluxe Data Systems provided debit switching processing services for NYCE based on the flagship CONNEX product. NYCE later took the processing in-house, based on a licensed version of CONNEX. Even today, CONNEX is a leader when it comes to very high volume switches like NYCE, and the synergy analysis should be straightforward. Looking ahead, the gap that has endured the Deluxe-eFunds-Fidelity chapters, is for a product that could compete effectively with ACI's Base 24 at smaller networks for switching and peripheral functions like ATM driving... another acquisition down the road?
It's in the cards. Fidelity brings with it a strong card processing base aimed at predominantly issuance processing for credit unions. This business has preserved its dominance in the credit union space right from its inception as Telecredit, through its acquisition by Equifax, spin-off as Certegy, and subsequent purchase by Fidelity. This is a net plus, as there is nothing on the Metavante side that enjoys a leadership position in this segment.
Striking the right image. Both companies moved into image based check, remittance and document processing through acquisitions. Metavante has a comprehensive offering from its purchases of AFS, Vectorsgi, Endpoint Exchange,Vicor and Treev. Its strategy has been to grow the medium sized institution AFS business base, while taking its image work-flow expertise up market to large institutions, leveraging account relationships and IBM CPCS based product knowledge from Vectorsgi. The Fidelity offering is primarily based on its acquisition of Bankware. There will likely be a need to rationalize offerings between the erstwhile Bankware and AFS product lines.
There has always been a gap in the old AFS line at the very low end (institutions of less than $100 million in assets). There may be a case for looking at the Fidelity (Bankware) line as an alternative. I suspect, however, that both companies will look at addressing the low end through outsourced item processing services. The choice of the right platform will depend on multi-institution capability. Both Bankware and AFS originally built products for in-house licensed use. It is often the case with products initially built for in-house licensed use that functions like partitioned databases and multi-customer billing (as opposed to operating a different instance of the product to serve each customer), are part of later redesign efforts. Both companies have been at the multi-institution outsourcing business for a while, and it is entirely possible that both platforms lend themselves adequately to the needs today. Metavante's Vicor acquisition brings a high end wholesale remittance product line which doesn't have an equivalent on the Fidelity side. The Endpoint Exchange check image exchange network is unique with the many thousand routing and transit points served, although it is still challenged in its ability to offer a convincing alternative to the Federal Reserve.
Check it out. Fidelity has a check verification and guarantee business that includes the well known SCAN check verification system, courtesy eFunds. There could be interesting synergies between these check services, and Metavante's merchant capture products and services. Being able to assess payment risk at the point of check image capture can be a powerful combination, particularly if there are thoughts of launching "bank agnostic" merchant capture services. A broader approach to assessing debit risk- a debit bureau if you will- can also include Chex Systems from the erstwhile eFunds stable which is easily the most well established new account risk management system in the country.
Across the oceans. While the two companies together will operate in 27 countries and serve customers in 90, the international presence comes mostly from Fidelity. The expansion overseas has its roots in a strategy on the part of what was then Equifax Card Services to take its card processing expertise beyond U.S. shores. This has grown into a viable global presence. Fidelity's eFunds acquisition also brought with it a large presence in India, which provides a base of lower cost, high quality technology development expertise. This operation has its roots in the joint venture established between Deluxe Corporation and India's HCL Corporation in the mid-1990s to tap into India's growing technology base (eFunds was later spun off from Deluxe). Metavante's international presence is more modest, comprising mostly of distributor based product sales and recent agreements with Temenos and Monitise. The future augurs well for Fidavante's international expansion, as it is not beset with the same scale of integration challenge as the home base.
Cultural Exchange. In most mergers, getting different cultures to work together is more difficult than rationalizing products and technologies. At first glance, Fidelity and Metavante are similar in that they are both providers of banking and payment processing services to mostly mid-sized institutions. Processors tend to have a culture that is unique in that there is great emphasis on operational efficiency to keep pushing those "clicks" through. A closer examination yields a few differences. Metavante had its origins as the captive data processing center of the Marshall and Ilsley bank. Until the spin-off of a year or so ago, the company grew dramatically under the ownership of the large mid-western bank. The company prides itself on customer service, and was able to develop its culture in a relatively stable atmosphere. The Florida based Fidelity has grown through the acquisition and absorption of sizeable businesses with varied histories. As discussed previously, Fidelity is also more global in its footprint. While I don't see any "show-stoppers", it should be recognized that there will be varied perspectives at the table.
A third pole? Almost more interesting than the Fidavante saga is the potential shift in the competitive landscape. The combined entity presents a formidable challenge to Fiserv. With the exception of not being able to match Fiserv's dominance in the ACH arena with its PEP+ product, it is arguably set to becoming the second pole in this business. Does this signal a rush for scale on the part of others? Like nascent planetary systems, there is the need for a center of mass around which alternate poles develop. Will it be First Data, privatized now, and debit payment-centric in posture? Can an SAP or an Oracle morph from being horizontal players to slugging it out in this vertical market? Where does Intuit go, post the Digital Insight acquisition- was that just a toe in the water or a harbinger of a more purposeful move into banking and payments? Where does this leave the many niche players in the marketplace?
It is possible that nimbleness and innovation will serve niche players while the big players sort out the integration challenges. They will do well, however, to heed the adage that the grass gets trampled when elephants quarrel. To take on the dominant players on their terms- especially those who can leverage their core banking business base- is suicide. The niche players only have two choices: Become a bigger fish, or find a smaller pond.
Predicting course and speed in choppy waters is difficult at best. Nevertheless, the observations offered here, as well as insights from those with other perspectives, makes this a fascinating development to watch.
What do you think? Post you comment below.
Vijay Balakrishnan, president of StratEx, LLC (770-598-5747) passes along the following blog entry with his musings on the recent merger between Fidelity National Information Services and Metavante. For more insights from Balakrishnan, visit his Web site at www.stratexllc.blogspot.com.
In an era characterized by synthesized monikers a la "Brangelina" for famous couples, "Fidavante" is perhaps warranted for the entity to be created by Fidelity National Information Services' acquisition of Metavante. The combination promises to be a powerhouse to rival Metavante's cross-town rival Fiserv. With over 2200 core banking customers and 220 million cards processed, Fidavante's potential operating leverage is nothing short of phenomenal. The road to fruition, however, is dependent on the successful integration of two complex organizations.
At the core. The greatest payoff, arguably, is in the rationalization and rejuvenation of the combined core banking base. As the oft repeated watchword argues, "Core is King!" It is also the most difficult integration challenge ahead. Both companies have large customer bases with legacy systems. The Fidelity repertoire includes customers on systems as disparate as Systematics, Horizon, Mercury and Miser. The Metavante stable includes the Integrated Banking Suite (IBS) platform, as well as the Bankway products that came by way of the Kirchman acquisition- the latter marketed through both outsourced and in-house license models. In addition, Metavante has entered into an agreement with Temenos to produce a next-generation core banking solution for large U.S. banks. The Fidelity equivalent is its Profile product.
There are myriad strategy alternatives. Does it make sense to focus the new technology from either Temenos or Profile on effecting a technology turn within the existing small-to-medium sized institution base? Notwithstanding the daunting number of conversions, it can be argued that this option is easier than the heart surgery of core replacement in a large bank. Or is it better to leave the legacy base as is for now, and use the next-generation platform to go after larger institutions? How does one pick a winner between Temenos and Profile, given the shots across the bow already being fired with the recent statement from Temenos that its agreement with Metavante is binding on post acquisition successor parties? If large banks are the target market, exactly how big is big?
Whale hunting perils. I suggest the foremost prerequisite for success is to get a clearly articulated strategy for each core banking market segment. It can be argued that both companies have a predominantly small-to-medium financial institution footprint. Thus, execution of a strategy for that segment, regardless of what that ends up being, is likely to come naturally to the combined entity. Scaling the heights of large institutions, on the other hand, is a different matter. Selling to, and serving large, whale-like institutions is an art by itself, considering the long selling cycles, significant customization, and the volatility that large deals bring to the P&L lines. That said, there are elements within both companies that have come by way of acquisition that have a large-institution history. The trick will be to identify those skill sets, and allow them to succeed within an operating mileu that has long been used to the relative predictability of smaller institutions.
Switch hitting. The payments side of the business offers major synergies. The NYCE network from Metavante and the debit switching operation from Fidelity's eFunds acquisition are natural fits. The synergies between these two entities stretch back in history to when eFunds was part of Deluxe Corporation. If memory serves me right, Deluxe Data Systems provided debit switching processing services for NYCE based on the flagship CONNEX product. NYCE later took the processing in-house, based on a licensed version of CONNEX. Even today, CONNEX is a leader when it comes to very high volume switches like NYCE, and the synergy analysis should be straightforward. Looking ahead, the gap that has endured the Deluxe-eFunds-Fidelity chapters, is for a product that could compete effectively with ACI's Base 24 at smaller networks for switching and peripheral functions like ATM driving... another acquisition down the road?
It's in the cards. Fidelity brings with it a strong card processing base aimed at predominantly issuance processing for credit unions. This business has preserved its dominance in the credit union space right from its inception as Telecredit, through its acquisition by Equifax, spin-off as Certegy, and subsequent purchase by Fidelity. This is a net plus, as there is nothing on the Metavante side that enjoys a leadership position in this segment.
Striking the right image. Both companies moved into image based check, remittance and document processing through acquisitions. Metavante has a comprehensive offering from its purchases of AFS, Vectorsgi, Endpoint Exchange,Vicor and Treev. Its strategy has been to grow the medium sized institution AFS business base, while taking its image work-flow expertise up market to large institutions, leveraging account relationships and IBM CPCS based product knowledge from Vectorsgi. The Fidelity offering is primarily based on its acquisition of Bankware. There will likely be a need to rationalize offerings between the erstwhile Bankware and AFS product lines.
There has always been a gap in the old AFS line at the very low end (institutions of less than $100 million in assets). There may be a case for looking at the Fidelity (Bankware) line as an alternative. I suspect, however, that both companies will look at addressing the low end through outsourced item processing services. The choice of the right platform will depend on multi-institution capability. Both Bankware and AFS originally built products for in-house licensed use. It is often the case with products initially built for in-house licensed use that functions like partitioned databases and multi-customer billing (as opposed to operating a different instance of the product to serve each customer), are part of later redesign efforts. Both companies have been at the multi-institution outsourcing business for a while, and it is entirely possible that both platforms lend themselves adequately to the needs today. Metavante's Vicor acquisition brings a high end wholesale remittance product line which doesn't have an equivalent on the Fidelity side. The Endpoint Exchange check image exchange network is unique with the many thousand routing and transit points served, although it is still challenged in its ability to offer a convincing alternative to the Federal Reserve.
Check it out. Fidelity has a check verification and guarantee business that includes the well known SCAN check verification system, courtesy eFunds. There could be interesting synergies between these check services, and Metavante's merchant capture products and services. Being able to assess payment risk at the point of check image capture can be a powerful combination, particularly if there are thoughts of launching "bank agnostic" merchant capture services. A broader approach to assessing debit risk- a debit bureau if you will- can also include Chex Systems from the erstwhile eFunds stable which is easily the most well established new account risk management system in the country.
Across the oceans. While the two companies together will operate in 27 countries and serve customers in 90, the international presence comes mostly from Fidelity. The expansion overseas has its roots in a strategy on the part of what was then Equifax Card Services to take its card processing expertise beyond U.S. shores. This has grown into a viable global presence. Fidelity's eFunds acquisition also brought with it a large presence in India, which provides a base of lower cost, high quality technology development expertise. This operation has its roots in the joint venture established between Deluxe Corporation and India's HCL Corporation in the mid-1990s to tap into India's growing technology base (eFunds was later spun off from Deluxe). Metavante's international presence is more modest, comprising mostly of distributor based product sales and recent agreements with Temenos and Monitise. The future augurs well for Fidavante's international expansion, as it is not beset with the same scale of integration challenge as the home base.
Cultural Exchange. In most mergers, getting different cultures to work together is more difficult than rationalizing products and technologies. At first glance, Fidelity and Metavante are similar in that they are both providers of banking and payment processing services to mostly mid-sized institutions. Processors tend to have a culture that is unique in that there is great emphasis on operational efficiency to keep pushing those "clicks" through. A closer examination yields a few differences. Metavante had its origins as the captive data processing center of the Marshall and Ilsley bank. Until the spin-off of a year or so ago, the company grew dramatically under the ownership of the large mid-western bank. The company prides itself on customer service, and was able to develop its culture in a relatively stable atmosphere. The Florida based Fidelity has grown through the acquisition and absorption of sizeable businesses with varied histories. As discussed previously, Fidelity is also more global in its footprint. While I don't see any "show-stoppers", it should be recognized that there will be varied perspectives at the table.
A third pole? Almost more interesting than the Fidavante saga is the potential shift in the competitive landscape. The combined entity presents a formidable challenge to Fiserv. With the exception of not being able to match Fiserv's dominance in the ACH arena with its PEP+ product, it is arguably set to becoming the second pole in this business. Does this signal a rush for scale on the part of others? Like nascent planetary systems, there is the need for a center of mass around which alternate poles develop. Will it be First Data, privatized now, and debit payment-centric in posture? Can an SAP or an Oracle morph from being horizontal players to slugging it out in this vertical market? Where does Intuit go, post the Digital Insight acquisition- was that just a toe in the water or a harbinger of a more purposeful move into banking and payments? Where does this leave the many niche players in the marketplace?
It is possible that nimbleness and innovation will serve niche players while the big players sort out the integration challenges. They will do well, however, to heed the adage that the grass gets trampled when elephants quarrel. To take on the dominant players on their terms- especially those who can leverage their core banking business base- is suicide. The niche players only have two choices: Become a bigger fish, or find a smaller pond.
Predicting course and speed in choppy waters is difficult at best. Nevertheless, the observations offered here, as well as insights from those with other perspectives, makes this a fascinating development to watch.
What do you think? Post you comment below.
Thursday, April 2, 2009
A Message from Frank Martire
Posted by Mark Brousseau
The following is a copy of an e-mail that was sent to all Metavante employees on April 1, 2009:
An Important Announcement: A Message from Frank Martire
Today we are pleased to announce that the Boards of Directors of Fidelity National Information Services, Inc. (FIS) and Metavante Technologies, Inc. (Metavante) have approved a plan to combine our companies. This combination positions us to offer one of the industry’s most comprehensive ranges of core processing, payment and risk management services to financial institutions and other businesses worldwide.
Both companies are preeminent leaders in our industry. FIS is ranked the number one banking technology provider in the world by American Banker and the research firm Financial Insights in the annual FinTech 100 rankings.
Headquartered in Jacksonville, Florida, FIS maintains a strong global presence, serving more than 14,000 financial institutions in more than 90 countries. Metavante is based in Milwaukee, Wisconsin and brings a 45-year tradition of innovative solutions and client partnership, serving 8,000 financial services firms and businesses worldwide.
The name selected for the newly combined company is Fidelity National Information Services, Inc., with the corporate headquarters to be located in Jacksonville, Florida. Following the completion of the transaction, the company will be publicly traded on the New York Stock Exchange under the “FIS” ticker symbol.
Leadership Team
The following individuals have been named to the new FIS leadership team:
Strategic Rationale and Benefits
You are probably wondering about the rationale behind the decision to combine FIS and Metavante.
Here are some of the key benefits:
Scale and Reach – The scale of the combined company creates efficiencies, which improve our long-term competitive position. We also gain the ability to leverage FIS’s global reach to sell Metavante products outside North America.
Product Breadth and Depth – Our combined product and service portfolio will enhance our growth prospects. The increase in core banking relationships expands our cross-selling opportunities, giving us complete coverage of the top 100 financial institutions. In addition, we become an industry leader in item processing, prepaid card solutions and credit card processing for community banks.
Financial Strength – The combined company has more than $5 billion in pro forma 2008 revenue and a high percentage of recurring revenue. Increased cash flow will allow us to fund growth opportunities and to further pay down our debt ― both very important in this challenging economy.
As both the banking and financial technology industries continue to consolidate, combining our two companies is the best way to position the new FIS for future growth and long-term success.
Your Role
Focus on our clients. Each and every decision we make is with our clients’ best interests in mind. It is very important that we continue to deliver excellent service throughout the integration period and beyond. Assure our customers that the superior service and support provided by each of our companies will continue and then follow through by delivering on our commitments.
Equip yourself with information to clearly communicate about the combined company and to explain the benefits. Share any client or employee concerns with your manager so an appropriate response can be identified. You may also e-mail employees.newFIS@Metavante.com with any questions you may have.
Direct any media inquiries to Marcia Danzeisen, SVP, Marketing and Corporate Communications for FIS at 904-854-5083 or Chip Swearngan, VP, Corporate Communications for Metavante at 414-357-3688.
Next Steps
The transaction is subject to approval by FIS and Metavante shareholders, receipt of regulatory approvals, and the satisfaction of customary closing conditions. While this planning process takes place, business line executives and sales representatives will meet with key clients to communicate the benefits of this combination and respond to any questions or concerns.
Concurrently, integration teams representing both companies will form to begin the planning process of creating an even stronger resulting organization. Until the transaction closes, please limit direct contact between employees of the two companies unless you are specifically requested to do so.
Thank You
In closing, we want to take this opportunity to thank you for your continued dedication and support. We have the best employees in the industry and we are excited about the new opportunities this important step in the evolution of our companies presents.
Lee Kennedy, President and CEO, Fidelity National Information Services, Inc.
Frank Martire, Metavante Technologies, Inc., Chairman and CEO
The following is a copy of an e-mail that was sent to all Metavante employees on April 1, 2009:
An Important Announcement: A Message from Frank Martire
Today we are pleased to announce that the Boards of Directors of Fidelity National Information Services, Inc. (FIS) and Metavante Technologies, Inc. (Metavante) have approved a plan to combine our companies. This combination positions us to offer one of the industry’s most comprehensive ranges of core processing, payment and risk management services to financial institutions and other businesses worldwide.
Both companies are preeminent leaders in our industry. FIS is ranked the number one banking technology provider in the world by American Banker and the research firm Financial Insights in the annual FinTech 100 rankings.
Headquartered in Jacksonville, Florida, FIS maintains a strong global presence, serving more than 14,000 financial institutions in more than 90 countries. Metavante is based in Milwaukee, Wisconsin and brings a 45-year tradition of innovative solutions and client partnership, serving 8,000 financial services firms and businesses worldwide.
The name selected for the newly combined company is Fidelity National Information Services, Inc., with the corporate headquarters to be located in Jacksonville, Florida. Following the completion of the transaction, the company will be publicly traded on the New York Stock Exchange under the “FIS” ticker symbol.
Leadership Team
The following individuals have been named to the new FIS leadership team:
- William Foley, Chairman of the Board (Current FIS Chairman of the Board)
- Lee Kennedy, Executive Vice Chairman of the Board (Current FIS President and CEO)
- Frank Martire, President and Chief Executive Officer (Current Metavante Chairman and CEO)
- Gary Norcross, Chief Operating Officer (Current FIS COO)
- Michael Hayford, Chief Financial Officer (Current Metavante President and COO)
Strategic Rationale and Benefits
You are probably wondering about the rationale behind the decision to combine FIS and Metavante.
Here are some of the key benefits:
Scale and Reach – The scale of the combined company creates efficiencies, which improve our long-term competitive position. We also gain the ability to leverage FIS’s global reach to sell Metavante products outside North America.
Product Breadth and Depth – Our combined product and service portfolio will enhance our growth prospects. The increase in core banking relationships expands our cross-selling opportunities, giving us complete coverage of the top 100 financial institutions. In addition, we become an industry leader in item processing, prepaid card solutions and credit card processing for community banks.
Financial Strength – The combined company has more than $5 billion in pro forma 2008 revenue and a high percentage of recurring revenue. Increased cash flow will allow us to fund growth opportunities and to further pay down our debt ― both very important in this challenging economy.
As both the banking and financial technology industries continue to consolidate, combining our two companies is the best way to position the new FIS for future growth and long-term success.
Your Role
Focus on our clients. Each and every decision we make is with our clients’ best interests in mind. It is very important that we continue to deliver excellent service throughout the integration period and beyond. Assure our customers that the superior service and support provided by each of our companies will continue and then follow through by delivering on our commitments.
Equip yourself with information to clearly communicate about the combined company and to explain the benefits. Share any client or employee concerns with your manager so an appropriate response can be identified. You may also e-mail employees.newFIS@Metavante.com with any questions you may have.
Direct any media inquiries to Marcia Danzeisen, SVP, Marketing and Corporate Communications for FIS at 904-854-5083 or Chip Swearngan, VP, Corporate Communications for Metavante at 414-357-3688.
Next Steps
The transaction is subject to approval by FIS and Metavante shareholders, receipt of regulatory approvals, and the satisfaction of customary closing conditions. While this planning process takes place, business line executives and sales representatives will meet with key clients to communicate the benefits of this combination and respond to any questions or concerns.
Concurrently, integration teams representing both companies will form to begin the planning process of creating an even stronger resulting organization. Until the transaction closes, please limit direct contact between employees of the two companies unless you are specifically requested to do so.
Thank You
In closing, we want to take this opportunity to thank you for your continued dedication and support. We have the best employees in the industry and we are excited about the new opportunities this important step in the evolution of our companies presents.
Lee Kennedy, President and CEO, Fidelity National Information Services, Inc.
Frank Martire, Metavante Technologies, Inc., Chairman and CEO
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