CheckFree has signed an agreement with UIL Holdings to acquire American Payment Systems (APS), a provider of walk-in bill payment services, for approximately $110 million in cash.
Based in Connecticut, APS provides walk-in bill payment services through a national network of more than 8000 retail and agent locations, which reaches 70% of consumers in the top 75 US metropolitan areas.
APS serves billers with contracted payment services and manages a network of non-contracted billers for electronic transaction processing. For 2003, the company expects to process nearly 120 million payments.
As part of the deal, CheckFree also acquires APS' pre-paid stored value MasterCard business, which uses the retail network to provide agents with payment services for consumers who do not have bank accounts.
Pete Kight, chairman and chief executive officer of CheckFree, says the new bill payment channel will significantly extend its reach, admitting that currently Checkfree doesn't reach the 20% of the US population that pay bills in person in retail locations.
"Combining APS' retail footprint with our current electronic billing and payment offering greatly enhances our value proposition to billers. In addition, APS' walk-in bill payment transactions leverage the efficiencies and economies of scale delivered through our end-to-end payment processing infrastructure," says Kight.
Checkfree says the lines of business it is acquiring have combined annual revenue, net of certain agent commissions, of more than $40 million per year.
The transaction is expected to close before the end of CheckFree's 2004 fiscal year, on 30 June 2004.