acquire Culverin Corp., a branch automation systems vendor, for $4.8 million. The deal would vault Portland, Ore.-based CFI, a developer of compliance software and electronic banking systems, into the center of the red-hot branch automation market, one of the fastest-growing segments in bank technology. Banks large and small have budgeted hundreds of millions of dollars in the past year to drastically revamp the computer systems used by tellers and platform officers to service and sell to customers, all at a time when the purpose and productivity of bank branches are being closely scrutinized in order to keep costs down. Dayton, Ohio-based Culverin, which CFI officials said had revenues of $4.5 million in 1994, is one of the leading suppliers of branch automation software. Other major vendors include Argo Data Research Corp, Broadway & Seymour Inc., International Business Machines Corp., Olivetti North America Inc., and Unisys Corp. Culverin has more than 450 customers worldwide, including such heavyweights as BankAmerica Corp. and Wells Fargo & Co. Its branch automation software, called Encore, is available on three different operating systems: Microsoft Corp.'s DOS and Windows, as well as Unix, which is used by a number of computer hardware companies. Most U.S. banks that have been installing new branch systems have selected software based on either Windows or IBM's OS/2 operating system, though a notable exception is Culverin client Wells Fargo, which has selected a primarily Unix-based solution. In addition to its line of branch software, Culverin markets document imaging software, called RPxpress, for retail payment processing. "The acquisition further broadens CFI's product line with the industry's finest teller and platform automation software, which have a proven appeal to financial institutions of all sizes," said Matt Chapman, chairman and chief executive of CFI Proservices. "Investments in branch automation systems are projected to grow to almost $600 million annually during the next three years, partly as a result of investments in Windows technology by financial institutions, according to industry research," Mr. Chapman noted. "There is no dominant player in the industry. By combining Culverin's products and our existing product lines, we intend to become the foremost provider of retail delivery systems." CFI officials said the company would take a one-time pretax charge of approximately $4.5 million in the fourth quarter to cover Culverin's research and development costs, as well as restructuring cost associated with the deal. Mr. Chapman said the acquisition would be nondilutive to earnings in fiscal 1996. Culverin's president, Eric Wagner, will become a senior vice president of CFI's retail delivery products division. Culverin's offices will remain in Dayton, company officials said.
Save $400 off your subscription. Special offer ends April 30, 2017.
No credit card required. Complete access to articles, breaking news and industry data.
Have an account? Sign In