Fidelity National MLS Systems and Solutions to Merge with Clareity Security
September 14, 2005
Announce Joint Marketing and SAFEMLS™ Preferred Provider Agreement
JACKSONVILLE, Fla. (AP) -- Check authorization provider Certegy Inc. said Thursday it agreed to merge with a unit of title insurance firm Fidelity National Financial Inc., creating a new giant in the financial processing industry.
Under the agreement, Certegy will merge with Fidelity National's information services unit in a stock-for-stock deal that gives Certegy shareholders 32.5 percent of the combined company. Fidelity's unit will own the remaining stake, with Fidelity itself owning 50.3 percent directly.
Each share of the Fidelity unit's stock will be exchanged for about 0.64 shares of Certegy stock. Certegy will also pay a $3.75 per share special cash dividend to its shareholders before the merger closes. The new company is expected to have nearly $4 billion of diversified, run-rate revenue and $1 billion of run-rate earnings before interest, taxes, depreciation and amortization.
Fidelity National shares closed at $39.76 Wednesday on the New York Stock Exchange; Certegy shares closed at $33.73.
Fidelity National's information services unit provides financial institution processing, mortgage loan processing and related information products and outsourcing services to financial institutions, mortgage lenders and the real estate industry. Certegy provides credit, debit, check risk management and cash access services to financial institutions and retailers.
After the merger, the new company will be called Fidelity National Information Services Inc. and is expected to trade on the Big Board under the trading symbol "FIS." Fidelity National Chairman and Chief Executive William Foley II will be chairman of the new company, while Certegy Chairman and CEO Lee Kennedy will be CEO of the new company.
The deal requires approval from Certegy's shareholders.
Copyright Associated Press