Fiserv to consolidate data processing centers after acquisition binge.

Financial outsourcer Fiserv Inc., looking to recalibrate its growth strategy, has begun a program to consolidate its far-flung data processing operations, a company executive told an investors' group last week.

Leslie M. Muma, president and chief operating officer at Milwaukee-based Fiserv, said his company, after acquiring dozens of bank service bureaus over the past six years, was ready to "accelerate the consolidation of our data centers and products."

Fiserv expects to reduce the number of individual data processing facilities it operates from 31 to "10 or 12" over the next two to three years, Mr. Muma said, speaking before a well-attended conference sponsored by Minneapolis-based Piper Jaffray Inc. that focused on information-services and transaction-processing businesses.

As part of that process, Fiserv has selected six "best of breed" core accounting systems that will be used at the consolidated data centers, Mr. Muma said.

Mr. Muma was quick to add that Fiserv was sticking to its long-held policy of not forcing its banking clients to convert to different systems.

"We very proud of the fact we've had a 97% customer retention rate, and we're not going to jeopardize that" by compelling banks to change their core systems as part of the consolidation effort, Mr. Muma said. "The process will be evolutionary, but our strategy going forward will be more proactive."

Mr. Muma said he expects the consolidation effort to yield significant cost savings, as well as better focus Fiserv's investment in research and development.

Using an aggressive acquisition strategy, Fiserv has grown dramatically over the past few years, becoming one of the nation's largest financial outsourcing firms and earning solid reputation on Wall Street.

But some analysts are beginning to think that the outsourcing market is maturing, and that number of quality acquisition targets is declining.

But Mr. Muma disagreed with that assessment, saying Fiserv is continuing to pursue acquisitions, even as it seeks to rationalize its cost structure. "We have number of deals in the pipeline," he said.

He noted that the company is on target to meet analysts' 1994 earnings estimates of about 96 cents per share, up 20% from 1993. Revenues should top $550 for this year, he added.

In another presentation at the Piper Jaffray conference, a Deluxe Corp. executive said has company was looking to expand its transaction processing offerings.

Vern Yates, president of the electronic payment services division at St. Paul-based Deluxe, said his company would like to acquire a credit card merchant processing firm "sooner rather than later." But he added that Deluxe was not seeking a deal the size of First Data Corp.'s recent $700 million agreement to acquire Card Establishment Services.

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