Fidelity National Information Services Inc. says it has agreed to buy EFD/eFunds Corp. for $1.8 billion — the second acquisition announced by the company this week.

FIS, which provides processing, information services and outsourcing for financial institutions, mortgage lenders and retailers, said it will finance the acquisition of EFD with cash on hand and long-term debt.

EFD, which provides risk management, electronic fund transfers, prepaid card processing and global outsourcing for financial services companies in more than 80 countries, generated $552 million in revenue in 2006. EFD also provides point-of-sale fraud prevention to retailers and electronic benefits processing services to government entities.

FIS said the acquisition will produce $65 million in annual cost savings, which, along with synergies in the two company’s products and services, will boost profits in 2008. The deal is expected to be completed by the end of the third quarter, pending approval by regulators and EFD shareholders.

“The addition of EFD’s complementary product offerings, including EFT and prepaid card processing capabilities, underscores FIS’ commitment to provide the broadest range of products and services to our customers,” said FIS Executive Chairman William P. Foley II in a press release.

The acquisition also extends FIS’ presence in U.S. and international banking markets, and expands the distribution channel for the company’s core processing and risk analytic services, Foley said.

EFD chairman and Chief Executive Officer Paul F. Walsh said the company has been impressed by FIS’ success in assimilating a number of acquisitions in a relatively short period of time.

On Monday, FIS said it had acquired Applied Financial Technology, which provides risk analytics, analysis and data for the mortgage industry. Terms of the deal were not announced.

FIS said AFT’s applications are used by lenders and investors to price and trade billions of dollars in mortgages and mortgage-backed securities.

The acquisition will expand FIS’ market presence on Wall Street, by providing tools that incorporate prepayment, default and valuation analytics. These tools “enable FIS to provide loan scoring for relative default and prepayment propensities at the point of origination, which is an important differentiator in valuing the loans for subsequent securitization,” the company said in a press release.

FIS will also offer an AFT modeling product that allows mortgage-backed securities traders to improve the accuracy of mortgage default and prepayment predictions given a variety of macro-economic scenarios. The technology solution allows for a granular and realistic modeling of portfolio, securities and individual loan risk characteristics.

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