Recent mergers and acquisitions activity in the payments space.
CheckFree Inc. sold its M-Solution unit to Informa Investment Solutions for an undisclosed amount. M-Solution supplies database management systems to about 850 customers in the investment industry. CheckFree paid $14 million in stock for the business in 1999; it says it expects the sale to lower partial third-quarter revenues by about $1.5 million. (Contact: CheckFree Inc., 678-375-1595)
FastFunds Financial Corp. sold most of the assets of its Chex Services Inc. unit to Game Financial Corp., a Fidelity National Information Services Inc. unit. Terms were not disclosed. Chex Services runs an ATM, credit and debit card cash advance network, mainly in casinos and stores. FastFunds Financial is a holding company, itself majority-owned by Equitex Inc. another holding company. (Contact: FastFunds Financial Corp., 952-541-0455; Fidelity National Financial Corp., 904-854-5043)
Net 1 UEPS Technologies Inc. has made a $100 million offer to buy South Africa’s Prism Holdings Ltd. through its Net 1 Applied Technologies South Africa Ltd. unit. Prism makes secure online transaction processing, cryptography and integrated circuit card (chip/smart card) products, mainly for telecommunications and banking electronic transactions. (Contact: Net 1 UEPS Technologies Inc., 604-484-8750)
SafeNet Inc. says it’s buying Great Britain’s nCipher PLC for about $150 million in cash, or about twice nCipher’s latest reported net cash flow of $67 million. nCipher manufactures hardware security module (HSM) technology, disk encryption technology, and other identity protection and management tools. SafeNet plans to update its 2006 guidance in 60 days to include the deal. (Contact: SafeNet Inc., 443-327-1454)
Tier Technologies Inc., which has yet to file its 10-K for 2005, says it will also be late in filing its 10-Q for the quarter ended Dec. 31, 2005. Tier is the parent of Official Payments Inc. Tier says it’s found what it calls “a number of accounting issues,” and expects to restate all its financial statements for 2002 through 2004 as well as for all of 2005. These events caused Tier to default under a revolving credit agreement with its lender, City National Bank, which Tier owes a total of $1.6 million. Tier says it’s requested a waiver of default and expects to get it. Tier also says it received a staff determination letter from NASDAQ in January, advising Tier it was out of compliance for continued listing on NASDAQ. Tier requested a hearing from NASDAQ, held February 2. It’s awaiting a response. (Contact: Tier Technologies Inc., 571-382-1048)
US Bancorp’s NOVA Information Systems unit is paying $433 million for the merchant processing business of First Horizon National Corp.’s First Horizon Merchant Services Inc. operated by First Horzon National’s First Tennessee Bank subsidiary. The deal brings NOVA 53,000 merchant locations in the United States, Canada and Puerto Rico, 400 employees, and FHMS’ systems, sales and operations centers. FHMS is the second largest acquirer of hospitality transactions in the United States. The credit and debit card processing volume from this agreement is expected to add approximately $25 billion annually to NOVA’s processing business. (Contact: NOVA Information Systems, 678-731-5064; First Horizon Merchant Services, 303-268-2688)
VeriSign Inc.is buying Snapcentric Inc. for $12 million. The transaction is expected to close later this quarter. Snapcentric, which has operations in the U.S. and Israel, produces a so-called self-learning authentication system, based on pattern-recognition technology, that compares a customer’s online behavior with what’s going on in a particular online session. If the customer’s behavior deviates from established patterns, the session is flagged. VeriSign will be marketing the systems as the VeriSign Fraud Detection Service, which will be geared to the bank authentication market. Snapcentric’s employees in the United States and Israel will become VeriSign employees. The company says revenue and earnings contributions from the acquisition will not be material to its 2006 financial results. (Contact: VeriSign Inc., 650-426-3744)