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ACI Worldwide to Acquire Official Payments

By Rich Duprey - Sep 24, 2013 at 11:02AM

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Payments systems provider adds bill paying service to portfolio in $109 million deal.

Payment systems provider ACI Worldwide (ACIW -0.23%) announced Monday an all-cash deal to purchase electronic bill payment service provider Official Payments Holdings for $8.35 per share. The transaction values the EBPP (electronic bill presentment and payment) company at an enterprise value of approximately $109 million.

With more than 3,000 customers representing access to more than 100 million end users, Official Payments processes approximately 20 million payments every year, representing over $9 billion in volume.

Saying the acquisition supports ACI's strategy of providing a complete set of end-to-end payment services, President and CEO Philip Heasley said in a statement, "The acquisition will further extend ACI's leadership in the fast-growing EBPP space, expanding our portfolio across key sectors including federal, state and local governments, municipal utilities, higher education institutions, and charitable giving organizations."

ACI will commence a cash tender offer to purchase all outstanding shares of Official Payments on Oct. 4, and in connection with the deal, entered into a separate agreement with Parthenon Capital Partners, which owns 10.8% of Official Payments' stock, in which the shareholder agreed to tender its shares during the offer period. The tender offer will expire at 12:00 midnight New York City time, 20 business days after the tender is commenced

ACI Worldwide says the transaction is expected to be accretive to full-year earnings in 2014.


Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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