Mergers and Acquisitions

Florida company to acquire Metavante

Milwaukee will soon lose the headquarters of another publicly traded company, as Metavante Technologies Inc. has agreed to be acquired by Fidelity National Information Services Inc. of Jacksonville, Fla.

The transaction, expected to close in the third quarter, will create the world’s largest provider of comprehensive integrated payment and financial core processing services. The companies anticipate $260 million in cost synergies and increased long-term organic revenue growth with the merger.

Under the terms of the agreement, Metavante shareholders will receive a fixed exchange ratio of 1.35 shares of FIS common stock for each share of Metavante common stock they own. The pro forma enterprise value of the combined company is approximately $10 billion.

"The combined scale, complementary product capabilities and market breadth of these two great companies will drive significant competitive advantages in the increasingly dynamic marketplace," said William Foley II, chairman of FIS.

"By bringing these two companies together, we expect to accelerate revenue growth, drive higher profitability, and create greater financial flexibility for growth investments and acquisitions," said Frank Martire, Metavante’s current chairman and chief executive officer. "In addition, the size, scope and geographic reach of the combined company will offer even greater opportunities to our employees, world-wide."

The leadership team will be comprised of executives from both companies:

Foley will serve as chairman of the board of FIS.

Lee Kennedy, currently FIS president and chief executive officer, will serve as executive vice chairman of the board with responsibility for integrating the two companies.

Martire will be named president and chief executive officer of FIS.

Reporting to Martire will be Gary Norcross as chief operating officer (current COO of FIS) and Michael Hayford as chief financial officer (current president and COO of Metavante).

George Scanlon (current chief financial officer of FIS) will serve as executive vice president of finance.

Following the completion of the transaction, the board of directors will consist of six FIS board members and three Metavante directors. The merged company’s headquarters will be in Jacksonville.

The combination of the two companies will likely result in job losses, but they have not been identified yet, said Chip Swearngen, vice president of corporate communications with Metavante.

“We have not gotten to levels of specificity but clearly there will be some overlap in certain corporate functions,” he said. “The companies now have to put together some teams to plan how the integration will occur.”

Although Martire and Hayford will move to Florida, Metavante and FIS will continue to have a large corporate presence in Milwaukee. Both companies own and lease numerous buildings in the metro area and several of them will be retained, Swearngen said.

The transaction will be structured as a tax-free reorganization whereby Metavante will be merged with and into a newly formed subsidiary of FIS. Based on the 1.35 fixed exchange ratio, FIS would issue approximately 162 million basic shares to Metavante shareholders.

The transaction is subject to approval by FIS and Metavante shareholders, receipt of regulatory approvals and the satisfaction of customary closing conditions.

Metavante said that its largest shareholder, an entity affiliated with Warburg Pincus that currently owns 25 percent of the outstanding common stock of Metavante, has entered into a support agreement with FIS pursuant to which it has agreed, subject to the terms and conditions of the support agreement, to vote in favor of the transaction. Upon completion of the deal, Warburg Pincus will be the largest single shareholder of the new company with approximately 11 percent ownership and will have board representation. FIS and Metavante expect to complete the transaction in the third quarter of 2009.


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