FIS to acquire Metavante

Fidelity National Information Services Inc. (FIS) yesterday agreed to acquire Metavante Technologies Inc. (MV), a provider of processing services to financial institutions, in a stock deal valued at $2.94 billion, Dow Jones Newswires reported.

The deal strengthens Fidelity National's presence in the financial-information technology market. IT providers generally rely on a steady stream of recurring revenue, which will help them through the economic downturn, but weakness in the U.S. financial sector can still affect the companies.

Under the deal, Fidelity will swap 1.35 shares of its stock for each Metavante share held. The deal values Metavante at $24.57 a share, a 23 percent premium to its Tuesday closing price.

Fidelity National Chairman William P. Foley II will serve as chairman of the combined company, while Metavante Chairman and Chief Executive Frank R. Martire will be chief executive.

Fidelity National and Metavante have "highly diversified and recurring revenue streams," the companies said. In 2008, the companies generated pro forma combined revenue of $5.2 billion. Fidelity expects the deal to produce cost savings of roughly $260 million and begin adding to earnings in 2010.

Metavante, a 2007 spin-off of Marshall & Ilsley (MI), has been offering processing services to financial institutions for more than 40 years. Its services include outsourced deposit, loan, and trust account processing, check processing, electronic funds transfer, commercial treasury services, and health-care payments services. The highly acquisitive firm has made a series of purchases in recent years that have broadened its footprint in all of its sectors.