M&I Data Services Inc. has announced plans to acquire EastPoint Technology Inc., a maker of client-server banking software.

Terms of the deal were not disclosed, but industry observers estimated a price of $10 million to $20 million.

EastPoint, of Bedford, N.H., said it is expecting $5.3 million of revenues this year. The company has 45 employees and relationships with 34 banks.

William Bradway, a consultant at the Tower Group in Wellesley, Mass., described the deal as a "strategic fit" for both companies.

The deal gives EastPoint access to M&I Data's established distribution and support networks, he said. M&I, a unit of Milwaukee-based Marshall & Ilsley Corp., is a leading provider of technology services to banks.

M&I Data gets EastPoint's ready-to-use software for deposit and loan processing, customer information file development, teller transactions, and general ledger accounting, Mr. Bradway said.

M&I Data executives said they plan to sell EastPoint products as turnkey systems, meaning banks would run their own systems using the software.

However, because M&I is one of the nation's largest providers of outsourcing services to banks, observers said it would not be surprising if the company eventually offered access to the software through a service bureau.

Joseph Delgadillo, president of M&I Data, said he expects $50 million of annual sales from the EastPoint acquisition by the end of the decade.

"This is a tremendous market for us," Mr. Delgadillo said. "This is not an area that we have been able to service."

Because EastPoint has several community banking clients overseas, the deal opens foreign markets to M&I Data, which historically has sold mainframe systems to large banks overseas.

EastPoint has relationships with 14 banks, both foreign and domestic, and ties to another 20 in the United States through franchise agreements. These banks range in asset size from $50 million to $3 billion.

Industry watchers were generally upbeat about the deal, but some noted cultural differences between the acquirer and acquiree.

M&I Data is a conservatively run unit of a conservative bank, and many of its top executives hail from International Business Machines Corp., experts said. EastPoint reportedly is managed in a more entrepreneurial style.

"It's a big bureaucratic structure versus a small company that moves very quickly and doesn't allow things to get in its way," said Carl Faulkner, a managing director at M-One Inc., a Phoenix-based consulting firm.

The deal should be completed in August. EastPoint will change its name to M&I EastPoint, said Mr. Delgadillo, and the company said it would retain all employees at its New Hampshire office.

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