Checkfree Corp., which is trying to get out of noncore businesses, announced that it would sell its mortgage software unit to London Bridge Software Holdings PLC.
Terms were not disclosed, but London Bridge, a U.K.-based developer of credit risk software, said recently that it would pay up to $24 million for Checkfree's mortgage unit. The deal is expected to close in August.
Checkfree, based in Atlanta, is selling several software units so it can concentrate on its core electronic commerce offerings. The units designated for sale produce revenues of about $40 million annually, said Sean Feeney, president of Checkfree's software division. The mortgage software unit, whose products are used by 400 customers, produced $11.7 million.
A source familiar with the deal said London Bridge believes the acquisition would provide "a real foothold in the U.S., which I think they need to think more about." The deal is London Bridge's second with Checkfree. Last August it bought the processor's recovery management software unit.
The source, who requested anonymity, said that London Bridge may have overvalued the unit. Mortgage technology vendors operate in a highly competitive market, the source noted.
Mr. Feeney said that most of the 10 bidders for the unit submitted "economic" offers, but that London Bridge offered what seemed to be a "strategic price."