A merger of Fidelity National Information Services Inc. and Metavante Technologies Inc. will create the world’s largest provider of payment and processing services to the financial industry, the companies said Wednesday.
Pending approval by regulators and shareholders of both companies, Milwaukee, Wis.-based Metavante will be merged into a newly formed subsidiary of Fidelity National Information Services in an all-stock deal valued at about $3 billion.
The combined companies would have $5.2 billion in annual revenue — and $3.8 billion in debt, including $1.45 billion in new obligations associated with the merger, which is expected to close in the third quarter.
Fidelity National Information Services said it will receive equity investments from its former parent company, title insurer Fidelity National Financial Inc., and affiliates of a private-equity firm, Thomas H. Lee Partners LP, for which it will issue 16 million new shares.
The companies expect the merger to generate $260 million in savings through "cost synergies" and boost profit margins.
Based in Jacksonville, Fla., Fidelity National Information Services provides processing and technology services to 40 of the worlds 50 biggest banks, employs more than 25,000, and had $3.4 billion in revenue in 2008.
FNIS spun off its Lender Processing Services Inc. unit, which provides mortgage processing services, settlement services, mortgage performance analytics and default solutions to a majority of the 50 largest U.S. banks, in July 2008.
Metavante has 5,900 employees in the U.S., Canada and Europe, providing services to about 8,000 financial firms that generated $1.7 billion in revenue in 2008. The company’s products and services facilitate account processing for deposit, loan and trust systems, image-based and conventional check processing, electronic funds transfer, and consumer health care payments.
In 2005, Metavante acquired GHR Systems, a company founded in 1985 by Jack Guttentag and Gerry Hurst, professors at The Wharton School of the University of Pennsylvania, to automate the process of providing consumers with better information about mortgage loan offers.
Known today as Metavante Lending Solutions, the company claims more than 70 mortgage, consumer and business clients, including users of the company’s mortgage-origination platform, Loan Origination Studio.
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