Most bank systems stocks were down slightly last week, as investors sloughed off technology issues overall.
In a week dominated by media reports of Microsoft's mega-hyped introduction of its Windows 95 personal computer operating system, investors seemed to be sticking to the adage of "sell on the news" as the software giant's stock ended the week lower along with other big technology players'.
But many financial technology outsourcing and information services firms saw their share prices rise, as mergers and acquisitions in the sector continue apace.
In the latest big deal to hit the sector, payroll processor Ceridian Corp. announced Thursday it had reached a definitive agreement to acquire Comdata Corp. in stock swap valued at $900 million.
Under terms of the agreement, shareholders of Comdata, a Brentwood, Tenn.-based provider of electronic funds transfer services to the transportation and gaming industries, will receive 0.57 shares of Ceridian stock, officials at the acquiring company said.
The combined company will have $1.3 billion in annual revenues, primarily from information services. Officials said they expected the deal to be accretive to Ceridian's earnings per share in 1996.
Chairman and chief executive Lawrence Perlman said the acquisition of Comdata brings additional heft to Ceridian's information services business.
"Comdata has a strong position in two large and growing markets," Mr. Perlman said. "In addition, because of the strength of Ceridian's balance sheet, we will be able to reduce the cost of Comdata's debt significantly."
"This transaction will greatly enhance Comdata's operating and financial flexibility, which we believe will translate into increased growth." said George L. McTavish, the Tennessee firm's chairman and chief executive. "We think the operational model we have implemented so successfully in transportation and gaming can be replicated in other large vertical markets."
Under the terms of the agreement, officials said Comdata will operate as an independent unit of Ceridian, with Mr. McTavish reporting to Mr. Perlman.
Completion of the transaction is expected to occur before the end of 1995. Two shareholders holding the majority of Comdata's convertible preferred stock between them - Welsh, Carson, Anderson & Stowe and Charterhouse Inc. - have separately agreed to vote in favor of the transaction, Ceridian officials said.
Comdata's common stock closed Friday at $25.125 per share, up $5.125 for the week.
Alltel Information Services Corp. announced last week that David M. Hicks, chairman of its Computer Power Inc. mortgage processing subsidiary, intends to retire at the end of this year.
Mr. Hicks, 59, a co-founder of the Jacksonville, Fla.-based processor in 1962, said he retiring to devote more time to his family, civic interests, and his other business interests, which include the Alliance Mortgage Co. and Enterprise Bank.
Computer Power president Jim Milligan will assume Mr. Hicks' responsibilities after Dec. 31, Alltel officials said.
