Payment processing company CheckFree plans to buy smaller rival Carreker for about US$206 million as a way to expand its software operations and consultancy business.
CheckFree announced Tuesday that it's entered into a definitive agreement to buy Carreker and, subject to regulatory approval, intends to acquire all outstanding Carreker common stock for US$8.05 per share.
In Friday's trading, Carreker's share price closed at US$7.64, not far off its 52-week high of US$7.89. The Nasdaq stock exchange was closed Monday to mark a national day of mourning for former U.S. President Gerald Ford, who died Dec. 26.
Like CheckFree, Carreker provides payment technology and consulting services to the financial services industry.
In November 2005, Carreker revealed it was embarking upon a review of its future strategy and soon afterward appointed Bears, Stearns & Co. as a financial advisor in the process. By June of last year, Carreker had begun to narrow its options to include a potential sale of the company or a merger with a strategic partner.
CheckFree hopes to close the acquisition of Carreker by the end of March. The move will allow CheckFree to incorporate Carreker's expertise in check conversion -- the capture and processing of digital images of paper-based checks -- into its payment processing capabilities. CheckFree hopes to enable more of its financial services users to convert paper checks into digital images at an earlier stage in the payment process, for instance, at the local branch level of banks soon after customers submit the paper checks.
With its headquarters in Dallas, Carreker has over 250 financial services organizations as its customers in the U.S., the U.K., and Ireland, elsewhere in Europe and in South America, Australia and New Zealand.
A year ago, CheckFree acquired phone payment services provider PhoneCharge for US$100 million in cash as a way to beef up its electronic billing capabilities.