Online Resources Corp. said Wednesday that its acquisition of Princeton eCom Corp. would increase its revenue by $20 million in the second half of 2006 but could reduce earnings by 7 to 10 cents a share.
The Internet banking outsourcer announced that it completed its purchase of Princeton eCom, the No. 3 provider of electronic billing and payment services, for $180 million in cash and securities. That was in line with the terms of the deal it announced in May.
Analysts have said the addition of the Princeton, N.J., payments company could give Online Resources enough biller relationships to challenge Metavante Corp., the technology subsidiary of the Milwaukee banking company Marshall & Ilsley Corp., for the No. 2 position in online bill payment, behind CheckFree Corp. of Atlanta.
Matthew P. Lawlor, Online Resources’ chairman and chief executive, said in a press release, “The combination with Princeton eCom clearly establishes Online Resources as a leader in electronic bill payments.”
The private equity firm Tennenbaum Capital Partners of Santa Monica, Calif., provided the financing for the acquisition by buying $85 million of new Online Resources debt and $75 million of convertible preferred stock.
Online Resources, of Chantilly, Va., said it now expects full-year revenue of $92 million to $95 million. Its previous guidance was $72 million to $75 million.
The company had said that it expected the acquisition to cut core earnings by 7 to 10 cents a share. It said Wednesday that it would update profit guidance during its second-quarter earnings call on July 24, after completing its assessment of tax and accounting issues.
Online Resources said it expects second-quarter earnings to reach or exceed its earlier guidance of $1 million to $1.3 million, or 4 to 5 cents a share. It said revenue would come in at the low end of its range of $17.4 million to $17.9 million.
