Banctec Inc., a provider of check and data processing systems, said it has an agreement to settle a class action related to its pending merger with the New York-based investment company Welsh, Carson, Anderson & Stowe.
The $525 million merger, announced April 5, values Banctec's shares at $18.50 each. The lawsuit, filed on behalf of shareholders, claimed that was too cheap, said Susan Seiter, a spokeswoman for Banctec. At the time, Banctec's stock was trading at $13 a share.
"When we announced the transaction in April, within hours a couple of lawsuits were filed questioning the valuation," she said.
Banctec said it settled the lawsuit by agreeing to provide information about financial dealings between Welsh, Carson, Anderson & Stowe and Goldman, Sachs & Co., Banctec's financial adviser.
In a separate announcement, Jack Henry & Associates, a Monett, Mo.-based bank software vendor, said it has reached a definitive agreement to buy Banctec's small banking software business for $50 million in cash.
The business unit produced $43 million of Banctec's $600 million of 1998 revenues.