S1 sells off FRS subsidiary
14 August 2006 | 5650 views | 0
Troubled fintech vendor S1 Corporation has sold its FRS subsidiary, which provides risk and regulatory compliance technology to financial services firms, to private equity firm The Carlyle Group and Kennet Partners, a technology investor.
James Mahan, CEO and chairman of S1, says the divestiture is part of the company's plan to refine the focus of its business to centre around delivering front office software to financial institutions.
Financial terms of the deal were not disclosed.
Earlier this year a group of investors that own a 7.2% share of Atlanta-based S1 have called for the sale of the underperforming business.
The investor group claimed the company had lost approximately 77% of its market value since January 2002, while revenue has declined by 13.8%, and the business continued to struggle despite significant capital investment.
S1 initially rejected the demands but later caved into investor pressure and agreed to explore "strategic alternatives to maximise shareholder value".
Last week the vendor reported second quarter revenue of $47.5 million, a two per cent decline on last year, and a net loss of $2.1 million, compared to a net profit of $2.3 million last year.