ACI Worldwide (ACIW) announced Thursday that it plans to purchase online banking company Online Resources Corp. (ORCC) and its bill payment technology for $3.85 per share in cash in a transaction valued at approximately $263 million. The deal is expected to close in the first quarter, said ACI executives on a call with investors.
The Naples, Fla. payments technology company ACI has been mulling plans to acquire the company for roughly a year, said ACI chief executive Philip G. Heasley on the call.
"This company's bill presentment and bill payment service is growing, and that combined with our ability to support online banking… I think it allows our core business, certainly our core online banking business, to grow at a very competitive rate," he said. "I think it gives us a totally different profile."
The acquisition certainly does provide ACI with new software to sell. ACI already had online banking software through its purchase of technology company S1, which was cleared last year by the Department of Justice. S1's consumer online banking software included personal finance management, electronic bill payment and presentment, account transfers, alerts and reminders, and online self-service tools.
Just last month, Online Resources began offering a new mobile browser bill pay service that gives people the chance to make payments using a mobile phone. The browser automatically detects from what device — mobile, tablet or desktop — a person is accessing billing information.
In addition, Online Resources currently has more than 1,000 financial institution and billing customers. The company processes more than 245 million bill payment transactions per year, ACI said in a press release. Its network connects roughly 9,000 billers.
"ACI is adding another set of products in order to provide more services to their existing customers," said Wedbush analyst Gil Luria. "Most importantly for them is the fast growing electronic bill presentment product, which is enjoying rapid growth."
Still, there are reasons to be skeptical of the acquisition.
S1 already uses Online Resources to provide bill pay services to its customers. “So I’m not sure how it helps them to own the electronic bill pay,” says Larry Berlin, a vice president and research analyst for First Analysis.
This is also a very competitive space, he says. “You have Fiserv, you have Intuit; you have [FIS]; and you have Jack Henry,” Berlin says. “All have some form of online and bill pay, and sometimes they use each others'.”