Intuit agrees buy-out of Echo in $142m deal

Source: Intuit

Intuit (Nasdaq:INTU) and Electronic Clearing House (Nasdaq:ECHO) have signed a definitive agreement for Intuit to acquire Echo.

Under the terms of the agreement, Intuit will pay $18.75 per share in cash in exchange for each share of Echo common stock, including shares issuable upon exercise of options. The total purchase price is approximately $142 million on a fully-diluted basis.

Echo, based in Camarillo, Calif., is a leading provider of end-to-end payment processing solutions, including check and bank card processing as well as check verification, collection, and guarantee services and automatic clearing house capabilities, or ACH.

"The acquisition of Echo will expand Intuit's reach and capabilities in the fast-growing payments market," said Steve Bennett, Intuit president and chief executive officer. "It will enhance our leadership position with small and medium-size businesses and help us accelerate growth."

With Echo's ACH capabilities, Intuit will be able to round out its payment offering with check services. The company will be able to offer solutions to merchants through a single portal, that address the most commonly used payment methods, including credit card, debit card, gift card, check verification/guarantee and check conversion. The combined offerings will be designed to save merchants time and money.

In addition, the acquisition of Echo will expand Intuit's sales and distribution channels and provide relationships with thousands of customers, including larger enterprise customers, such as retail and hotel chains.

"Echo's comprehensive payment processing services, technology platform, and established relationships with customers and partners along with Intuit's strong brand, innovative products and strong distribution are a winning combination," said Chuck Harris, Echo president and chief operating officer. "We also expect that our leading technology solution and our team of payment industry professionals will help the combined company continue to deliver new and innovative products."

The transaction is subject to regulatory review, ECHO shareholder approval and other customary closing conditions. The transaction is expected to close in the first quarter of calendar year 2007, at which time Echo will become a wholly-owned subsidiary of Intuit, and Echo's stock will cease trading.

The executive officers and directors of Echo entered into voting agreements with Intuit, pursuant to which the executive officers and directors agreed, among other things, to vote their shares of Echo common stock in favor of the transaction.

The proposed acquisition was approved by the board of directors of each company. Wedbush Morgan Securities advised Echo and rendered a fairness opinion in connection with the acquisition.

Comments: (0)