Fidelity National Information Services Inc.'s planned purchase of a consultancy could open new doors for its main technology business.
FIS said Tuesday that it is planning to buy the Belgian firm Capital Markets Co. NV this year, a move FIS said would help it reach new business worldwide.
"This is a different sort of acquisition for what we would normally categorize as a core processor or a software provider for the financial services industry," Nancy Atkinson, a senior analyst with Aite Group LLC in Boston, said.
"To my knowledge, they've never done anything like this before," she said. FIS' earlier purchases "have been primarily technology acquisitions," though it may have some experience in this space through its 2009 purchase of Metavante Technologies Inc., which owned a similar business, she said.
Though some clients may question the neutrality of the consulting arm of a vendor, Atkinson said the Capco purchase should provide sales opportunities FIS would not have as a pure technology company.
"The advantage to a company of having a captive consulting arm is that you have an ear to the ground to know what's happening in the marketplace, and you have an entree into the financial institutions … on the business side," Atkinson said.
That is particularly important because "the business people tend to be the ones with the money," she said.
FIS said it would pay $292 million in cash for Capco, with an additional amount based on its future performance. It expects Capco to have about $225 million in revenue this year. Capco's majority shareholder is Symphony Technology Group, a Palo Alto, Calif., private equity firm, which would not have any equity or interest in Capco when the sale is complete, FIS said.
FIS, of Jacksonville, Fla., said it would provide further details when it reports its third-quarter earnings on Oct. 26.
Frank Martire, FIS' president and chief executive, said in a press release that with Capco, it could offer clients "the powerful combination of FIS' breadth of technology and Capco's strong knowledge base and global industry expertise."
Atkinson said Capco's global reach should prove helpful for FIS in its efforts to expand to new markets.
