S1 has called off negotiations to sell its Edify electronic banking business after failing to agree a 'fair value' with prospective buyers.
Jaime Ellertson, S1's chief executive officer, comments: "Closing a transaction at a valuation we believed to be reasonable in this difficult economic period was not possible...We believe that we will generate a more appropriate valuation by running this business as part of our ongoing operations."
As a result of the termination of sale talks, the financial results of Edify will no longer be accounted for as discontinued operations. S1's first quarter results, due after markets close Thursday, will include a goodwill impairment charge of approximately $12 million. In addition, says the company, cost cutting at the unit will be reflected in restructuring charges of approximately $0.9 million.
Edify is expected to generate between $30 and $33 million in revenue for the calendar year 2003, and to be cash flow positive on a quarterly basis by the end of 2003.