CFI ProServices Inc. said it would buy Modern Computer Systems Inc., a family-run data processing business in Burnsville, Minn.
The Portland, Ore.-based software provider to community banks agreed to pay $6 million in cash and 50,000 shares of common stock for Modern Computer, which had 1998 revenues of $4.5 million.
The acquisition would give CFI an entree into the service bureau business.
Its software for branch automation, loan originations, account openings, call center operations, cross-selling, and electronic banking would become available on an outsourced basis.
"We see an opportunity to provide a fully integrated Y2K-compliant solution at extremely affordable prices," said Matthew Chapman, CFI's chairman and chief executive officer.
The acquisition would add 400 financial institutions to the 5,600 customers that use CFI's LaserPro for loan origination and Encore for retail delivery. CFI would combine Modern Computer's 46 workers, who would not relocate, with its 614 employees.
On Wednesday, CFI reported earnings for what Mr. Chapman called "the best year" of the company's 21-year history. Revenues for the fourth quarter increased 17%, to $24.4 million, and for 1998 increased 18%, to $85.6 million. Net income of $4 million for the year was down from $4.7 million, mainly because of acquisitions.
"We're extremely optimistic for this year," Mr. Chapman said.
The digital certificate company Verisign Inc. is benefiting from the Internet stock boom. Its share price rose 18% last week, trading Friday afternoon at $91.4375, reportedly buoyed by a secondary stock offering of 2.75 million shares last Thursday.
A source said Verisign officials were engaged in a "successful road show" of the stock offering last week.
Fourth-quarter revenue of $13.2 million was up 164% from a year earlier. The net loss was down to $2.5 million from $5.5 million.