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S1's board advised the company's shareholders not to accept the exchange offer ACI made in its hostile bid. ACI's offer, which would disrupt S1's planned merger with Fundtech, "is not in the best interests of S1 or its stockholders," S1 said.
September 13 -
Two important votes this month will determine fate of ACI Worldwide's hostile bid for S1, which would thwart S1's planned merger with Fundtech.
September 6 -
The payments technology vendor said its agreement to combine with S1 remains in effect as it reports a 16.4% increase in second-quarter revenue.
August 3 -
Two payment transaction software and service providers, S1 and Fundtech, have agreed to a "merger of equals" today in a deal valued at $700 million. Upon closing of the transaction, S1 shareholders will own approximately 55 percent and Fundtech shareholders approximately 45 percent of the combined company. The combined company will be headquartered at S1's headquarters in Atlanta and will be called Fundtech.
June 27
The board of the payments technology vendor Fundtech Ltd. plans to halt its intended merger with S1 Corp. after receiving a separate offer from the private equity firm GTCR.
The GTCR offer has not yet received approval from Fundtech shareholders, but Fundtech's board considers GTCR's offer to be superior to its agreement with S1 and has notified S1's board of its plan to terminate the merger, according to GTCR.
"We have been familiar with Fundtech for a long time," Collin E. Roche, a principal with GTCR, said over email. "Our understanding of and respect for the business increased over the past 12 months as we pursued our investment in BankServ, which closed in August."
GTCR plans to combine Fundtech with the software provider BankServ. The combined company would be called Fundtech Inc. and operate from Fundtech's Jersey City, N.J., headquarters. GTCR said Thursday that it is offering $23.33 in cash for each Fundtech ordinary share, or over $400 million altogether, and that the deal should be complete in the fourth quarter.
GTCR approached Fundtech before the S1 merger was announced, and "we were persistent in pursuing the opportunity, even after the S1 announcement, because of our great respect for Fundtech and its management team, and because the combination with BankServ made such great strategic sense," Roche wrote.
GTCR would also pay the $11.9 million termination fee that may be required under Fundtech's agreement with S1, Fundtech said in a separate announcement Thursday. S1 said in a press release that it is "reviewing its options."
The chief financial officers of S1 and Fundtech did not immediately return calls requesting comment.
S1 has been fighting to keep its merger with Fundtech on track despite increasing pressure from ACI Worldwide Inc., which has made several hostile offers to buy S1. S1's most recent rejection of ACI was on Tuesday, when S1's board advised shareholders not to accept an exchange offer ACI made last month.
ACI's hostile bid for S1 "further made for a challenging calculus," he wrote, "but that was not really core to our focus."
Reuven Ben Menachem, Fundtech's founder and chief executive, would be CEO of the new Fundtech. David Kvederis, founder and CEO of BankServ, would be a board member.
"GTCR's extensive experience investing in payment processing and banking-related businesses makes them a strong partner to support the continued growth of Fundtech," Ben Menachem said in a GTCR press release.
S1's board is able to propose changes to its merger agreement with Fundtech within five business days, GTCR said. In June, Fundtech and S1 announced a "merger of equals" valued at $700 million. Upon its completion, S1 shareholders were to own about 55% of the combined company and Fundtech shareholders were to own about 45%. The combined company, called Fundtech, was to be based in S1's Norcross, Ga., headquarters.
