Cybersource / Authoriza.net

Cybersource, the California-based company that provides electronic payment and risk management solutions, acquired Authorize.Net, a listed Massachusetts provider of IP-based payment solutions.
The deal is valued at USD 565m, according to a press release.

The acquisition joins two highly complementary businesses, positioning CyberSource to further capitalize on the growing Web-based payment opportunity.
Both companies are leaders in enabling e-commerce businesses to accept online payments for goods and services. CyberSource, with approximately 20,000 customers, has traditionally focused on managing payments for midsized and enterprise customers.

Authorize.Net, with more than 175,000 customers, has specialized in small businesses. Collectively, the companies processed approximately 1.1bn transactions in 2006, representing USD 65bn of e-commerce.
The acquisition will enable CyberSource to provide leading payment solutions to all segments of the e-commerce industry.

Under the agreement, Authorize.Net shareholders will receive 1.1611 shares of CyberSource common stock for every share of Authorize.Net common stock.
Additionally, shareholders will receive a pro-rata share of approximately USD 125m in the form of a cash payment. The agreement was approved by the boards of directors of both CyberSource and Authorize.Net.

Subject to obtaining applicable shareholder approvals and satisfaction of all regulatory requirements, the transaction is expected to close in late September or early October 2007.

This transaction is expected to be accretive in the fourth quarter of 2007 on a non-GAAP basis, which excludes stock-based compensation expense, a reduction in the tax allowance, the noncash portion of the tax provision, depreciation and amortization expense, and certain nonrecurring charges and income.

Goldman Sachs & Co. served as financial advisor to CyberSource, and Jefferies Broadview, a division of Jefferies & Co., served as financial advisor to Authorize.Net for this transaction.

(c) Company Press Release