FIS (FIS), the number-one financial services technology company on the FinTech 100 ranking, Thursday announced it has signed a definitive agreement to acquire mFoundry, a Larkspur, Calif.-based mobile banking and payments provider.

FIS, which already had invested in mFoundry, said it expects to pay about $120 million in cash to acquire the remaining ownership interest. FIS, out of Jacksonville, Fla., sells core processing among a broad suite of financial technology products. FIS generated $5.7 billion in revenue in 2011, 87 percent of it from the financial services industry.

The transaction, which is subject to customary regulatory approvals and contractual closing conditions, is expected to close by the end of the first quarter.

FIS and mFoundry told BTN they cannot provide any commentary until the deal closes.

mFoundry, founded in 2004, serves more than 850 clients.

Analysts view the deal as a sensible move that will benefit both companies.

"It's not very surprising," David Albertazzi, senior analyst at Aite Group, tells BTN. "It's a very logical move from the point of view of both companies."

The two companies "have been working together for quite some time," says Albertazzi. "They had a deep integration. They are basically buying the remainder. …It makes a lot of sense that, over time, FIS would want to own the assets in the mobile space."

Gary Norcross, president and chief operating officer at FIS, joined mFoundry's Board in 2008, for example.

Meanwhile, Albertazzi cites mid-2010 as when FIS began to take significant steps to strengthen its mobile offerings. It hired talent, created dedicated mobile development and strategic teams, built out infrastructure and partnered with mFoundry.

"The deal really makes sense," he says. "It continues on FIS's commitment to the mobile channel."

mFoundry has been dedicated to the mobile channel since its founding. "They are mobile subject matter experts," says Albertazzi, adding that mFoundry's reporting suite particularly shines at providing insights to financial institutions about their customers' mobile behaviors.

mFoundry, meanwhile, will gain greater reach and access and increased R&D, among other advantages. "I think it's good to be integrated into a large organization," Albertazzi says.

The acquisition announcement is one of many in recent months. Fiserv, the third largest provider of financial technology, announced in January it has acquired Open Solutions, a smaller provider of core banking software.

"It's been a busy time of year; it kicked off with acquisitions with what I call one-off technology companies that focus on a particular solution," says Marc DeCastro, research director of customer-centric bank strategies at IDC Financial Insights. "mFoundry was the most well-known of the standalones left."

To date, though, DeCastro says it's hard to know whether FIS's intent behind the acquisition is to gain the technology or to gain mFoundry's customer base. "mFoundry has always been one of the leaders in pushing new technology," DeCastro says.

Meanwhile, Peter Olynick, card and payments practice lead at Carlisle & Gallagher Consulting Group, who believes the deal will mutually benefit both companies, wonders: Will the combined organization be able to maintain the mFoundry culture of innovation? And does it even need to maintain that level of innovation in the future?

Olynick says the purchase will help FIS strengthen its mobile capabilities. "mFoundry was the force behind the Starbucks app," he says. "[FIS] will want to leverage those kind of abilities."

Aite's Albertazzi will be watching how FIS treats mFoundry's existing relationships with players Open Solutions.

"I think it will be interesting to see what happens, though FIS has a reputation to be very open and easy to work with and it might not be an issue," Albertazzi says.