CheckFree / Carreker

CheckFree, a listed Georgia e-commerce service provider, said it entered into a definitive agreement to purchase Carreker, a listed Texas payments technology provider.

The deal will expand CheckFree's software business and consulting expertise. Under the terms of the agreement, CheckFree will acquire all of the outstanding shares of Carreker common stock at a price of USD 8.05 per share, for a total purchase price of USD 206m on a fully diluted basis. Through this acquisition, CheckFree will expand its presence in payments processing to play a leading role in providing processing and risk management capabilities for ACH, check and cash. It will also become a leading provider of solutions and expert consultancy for the convergence of check and electronic payments.

Carreker is also a consulting services company for the financial services industry. The company has more than 250 clients in the US, UK, Ireland, Continental Europe, South America, and Australia. It reported revenues of USD 116.6m in fiscal 2005.

The proposed acquisition is subject to regulatory review, Carreker shareholder approval, and other customary closing conditions, and is expected to close by March 31, 2007.

CheckFree will finance the transaction with a combination of existing cash balances and revolving debt, although there are no financing contingencies in the merger agreement. The transaction is expected to be modestly dilutive to CheckFree's underlying earnings per share in the current fiscal year (ending June 30, 2007) and in fiscal 2008, and dilutive to GAAP earnings per share in each of 2007 and 2008. The company plans to share specific financial details when the transaction closes.

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