Under the terms of the agreement, CheckFree will acquire all of the outstanding shares of Corillian at a price of $5.15 per share. The pruchase price represents a 49% premium over Corillian's closing share price of $3.45 on Tuesday.

Founded in 1997, Corillian has been publicly traded on the Nasdaq since April 2000. The business employs approximately 270 staff and Corillian claims its Internet banking applications support over 25% of Web banking users in the US today.

CheckFree says the acquisition will bring together Corillian's online banking platform and complementary suite of financial applications with its electronic billing and payment services.

"Together, CheckFree and Corillian will be able to deliver more efficient integration and innovation, while increasing consumer service levels across the online banking experience," says Pete Kight, CheckFree chairman and CEO.

The deal will not be welcomed at Corillian rival S1, which last year agreed to integrate its online banking software with CheckFree's electronic billing and payment platform, and which has itself been exploring sale options.

The acquisition is subject to regulatory review, Corillian shareholder approval, and other closing conditions, and is expected to close on or by 1 June 2007.

CheckFree says it expects the transaction to be dilutive to GAAP earnings per share in its current fiscal year as well as fiscal 2008, and modestly dilutive to underlying earnings over the same period.

The acquisition is CheckFree's second this year. In January the vendor agreed to buy financial IT and consultancy firm Carreker Corporation for a total of $206 million.