NEW YORK (AP) - Fidelity National Information Services Inc. said Wednesday it will acquire Metavante Technologies Inc. in an all-stock deal valued at about $2.94 billion.
Based on Fidelity National’s share price, the deal values Metavante stock at a 23 percent premium over its Tuesday closing price of $19.96. Fidelity National shares closed Tuesday at $18.20.
Metavante shareholders will receive 1.35 shares of Fidelity National stock for each share of Metavante they own. Fidelity National will issue about 162 million shares as part of the acquisition.
Jacksonville, Fla.-based Fidelity National, which is unrelated to Boston-based Fidelity Investments, provides transaction processing, card issuer and outsourcing services for more than 14,000 financial institutions. Milwaukee-based Metavante provides banking and payments technologies for about 8,000 financial firms. Metavante was a unit of Marshall & Ilsley Corp. until 2007 when it was spun off as a separate public company.
The two companies combined to generate $5.2 billion in revenue in 2008. Fidelity National said it expects to achieve cost synergies of about $260 million after the acquisition is completed. The deal, which is expected to close during the third quarter, should boost Fidelity National’s earnings in 2010.
The new executive team will integrate employees from both companies. Lee Kennedy, Fidelity National’s current president and chief executive, will become executive vice chairman with the responsibility of overseeing the integration of Metavante. Metavante’s current chairman and CEO, Frank Martire, will be named president and CEO of Fidelity National. Gary Norcross will continue to serve as chief operating officer after the deal closes, while Michael Hayford will become chief financial officer. Hayford is currently the president and COO at Metavante.
The combined board will be made up of six Fidelity National directors and three Metavante directors.
Along with the acquisition, Fidelity National said it will receive equity investments from other firms, including affiliates of private-equity firm Thomas H. Lee Partners LP and title and specialty insurance firm Fidelity National Financial Inc. Fidelity National Information Services will issue about 16 million shares for those new investments.