After an aggressive acquisition campaign in this country, Fidelity National Financial Inc. is turning its attention elsewhere.
The Jacksonville, Fla., technology outsourcer said Tuesday that it is buying 74.9% of Kordoba GmbH & Co. KG, a German provider of core-banking software and services.
Analysts said the deal underscores an ambition to move beyond the domestic market but could make it harder for Fidelity National to promote its growing product list.
Fidelity National declined to say how much it would pay. The seller, Siemens Business Services GmbH & Co. OHG of Munich, would retain a 25.1% interest in Kordoba.
The purchase, which is expected to close by Sept. 30, would position Fidelity National "to benefit from the growth opportunity in the German core-processing market," said William P. Foley 2d, its chairman and chief executive, in a press release. Kordoba will provide "a significant foundation in this key European economy to assist in the realization of our overall expansion plans throughout Europe,"
A spokesman said Fidelity National could not go beyond the release. It is in a mandated quiet period as it prepares to spin off its tech operations as Fidelity National Information Services Inc. The spinoff may not be complete until mid-2005.
Kordoba provides core transaction processing software and outsourcing, mostly to German savings and commercial banks. It also offers automated teller machine driving; accounting and reporting; and securities processing.
In its last fiscal year, which ended Sept. 30, Kordoba earned about $29 million, before interest and taxes, on about $105 million of revenue.
Bill Bradway, the group vice president of retail financial services at Financial Insights Inc., a research firm in Framingham, Mass., said the deal could open the door for Fidelity National in other parts of Europe.
"It may provide secondary staging opportunities for penetrating the Austrian and Swiss banking markets," Mr. Bradway said.
In April, Fidelity National bought Sanchez Computer Associates Inc., a Malvern, Pa., core banking provider that has had particular success in eastern Europe. Mr. Bradway said Kordoba's products, which also target corporate and private banks, do not overlap with Sanchez's.
Jim Eckenrode, the vice president of consumer banking research at TowerGroup of Needham, Mass., a market research unit of MasterCard International, said Kordoba would move Fidelity National "along the path to serve any bank of any size anywhere in the world."
Christine Barry, an analyst at the research and consulting firm Celent Communications LLC of Boston, said a German foothold could enable Fidelity National to compete more effectively in Europe. The market there is moving faster in such areas as core-system replacement because of the transition to the euro and the shift of Communist states to market economies, she said.
"The current core systems can't handle a lot of changes, so there's a greater sense of urgency" than in the United States, whose tech market is struggling to revive from a three-year slump, Ms. Barry said.
However, Fidelity National may now have too many products, she said. "It's going to be difficult for the company to differentiate all of them." Though it has said it wants a single sales force to handle all its lines, "that's a lot easier said than done."
But Mr. Bradway said the variety of its purchases lets Fidelity National compete worldwide.
What some may see as a disconnected elements can be built into "a very compelling picture," he said.
