FIS + Metavante: What Does 1 + 1 Equal?

Analyst: Bill Bradway

April 2, 20009

The music stopped playing for another independent FinTech vendor on April 1, 2009. Fidelity National Information Services (FIS) agreed to buy Metavante (MV) in an all stock deal valued at $2.94 billion. These two vendors were the second and third largest FinTech vendors in 2008 based on annual revenue, trailing Fiserv. The pro forma combination will pass Fiserv with around $400 million to spare, based on 2008 revenues. Cost savings of $260 million per year and new cross selling potential are two key merger objectives.

This deal will shake up the FinTech market like no other deal to date. The shake up issue affects these two firms, their collective customer portfolios, other US and international FinTech vendors, and possibly a few very large Tech vendors, specifically IBM, HP, and Oracle. Management of the combined firms talks and looks more like a merger of equals than a traditional acquisition.

• What does this deal mean to banks, thrifts, and credit unions?
• How will this deal impact other FinTech vendors in the US and internationally?
• What are the potential potholes that could influence the upside or downside in this merger?

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