ACI Worldwide has pulled of a deal to acquire bitter rival S1 for approximately $360 million in cash and 5.8 million ACI shares.
The agreement between the two companies ends a protracted summer-long M&A battle which saw ACI Worldwide gatecrash S1's attempted merger with Fundtech. When Fundtech backed out of S1's embrace in favour of a deal with PE firm GTCR, its erstwhile suitor appeared desperately vulnerable to ACI's advances.
Under the agreement, which follows two previous rejections by S1, ACI will acquire the company for a blended value of $9.55 per share as of September 30, 2011, consisting of $6.62 per share in cash and 0.1064 shares of ACI common stock, which represents an increase of $0.42 per share in cash from ACI's previous offer.
The transaction will create a full-service enterprise payments powerhouse, capable of appealing to banks from the smallest to the largest.
Philip Heasley, president and chief executive officer of ACI, says: "The combined company will have enhanced scale, breadth and additional capabilities, as well as a complementary suite of products that will better serve the entire spectrum of financial institutions, processors and retailers."
He says ACI anticipates annual cost synergies of approximately $30 million from the merger, as well as expansions in margin.
ACI has received financing for the cash portion of the offer price from a syndicate of banks led by Wells Fargo. The transaction is expected to close in the fourth quarter of 2011.