Two deals in the past two days will soon have a pair of check businesses bouncing to new owners.
The banking technology outsourcing provider Fiserv Inc. said Tuesday that it had sold its minority stake in the check processor Intria Items Inc. to its majority partner, Canadian Imperial Bank of Commerce.
That announcement came a day after Honeywell International Inc. said it had agreed to sell its check printing business to M&F Worldwide Corp., a New York holding company.
Industry watchers said the two deals demonstrate that the business of creating and processing paper checks is ripe for consolidation as people write fewer checks.
Leslie M. Muma, Fiserv's president and chief executive, characterized the deal as a strategic move on CIBC's part. He said the Toronto banking company plans to offer Intria's item processing services to other banks.
Intria, of Mississauga, Ontario, was formed in 1996; Mr. Muma said CIBC decided to exercise a contractual option to make an offer for Intria rather than renew its deal with Fiserv. "We had a great joint venture with CIBC," he said in a phone interview Tuesday. "They just decided, at the end, to buy it back so they'd have more control over it."
Fiserv did not give a price for the deal but said the sale would probably add 15 cents a share to earnings this quarter. Fiserv hinted in its second-quarter earnings announcement that it would lose the Intria business, without naming Intria.
Robert Hunt, a senior analyst at TowerGroup Inc., the Needham, Mass., market research unit of MasterCard International, said that "we all agree check volume is in decline," which leaves companies with two choices: "bring in additional business, or exit the business."
But even though volume is in decline, many people still want to use checks, Mr. Hunt said. "We will have checks, I believe, for a long time," he said. "That argues for market consolidation."
Fiserv's decision to sell its stake in Intria may have been more opportunistic than part of a trend of consolidation, Mr. Hunt said. "I don't see that as a distress sale," he said. "I just think that they got an offer" that made more sense than holding on to the company.
The Honeywell deal follows the manufacturer's March purchase of Novar USA Inc., a diversified company with several different operations. Honeywell, of Morristown, N.J., has said it only wanted Novar's Intelligent Building Systems unit, which makes security and fire-detection products.
Rob Ferris, a Honeywell spokesman, said the company never considered keeping Novar's check printing business. "It just didn't fit with any of our businesses," he said in a phone interview.
M&F Worldwide agreed to pay $800 million in cash for Clarke American, the Novar business unit that operates the Checks in the Mail check printing company. The deal is expected to close by yearend.
Alenka Grealish, who manages the banking group at the Boston market research firm Celent Communications LLC, said check printing is not a core competency for Honeywell.
"It's interesting that somebody wants to buy" the Honeywell unit given the business' environment, Ms. Grealish said. "Check printing is like the railroads of the 1800s. It's a diminishing market."
