CheckFree Holdings Acquires TransPoint in $1.16 Billion Deal

Strategic Insights -

CheckFree Holdings has announced plans to purchase TransPoint, an electronic billing and payment venture jointly owned by Microsoft, First Data, and Citibank. The acquisition is valued at approximately $1.16 billion, and will give CheckFree Holdings access to a larger number of companies for online bill paying. The deal is expected to provide consumers with a more extensive range of options for electronic bill payments, accelerating the industry's growth.

Key Takeaways:

  • The acquisition is worth approximately $1.16 billion, based on the $68.25 closing price of CheckFree Holdings stock on the day of the announcement.
  • CheckFree Holdings will receive a total of 17 million shares of newly issued stock from Microsoft, First Data, and Citibank.
  • The joint venture between Microsoft, First Data, and Citibank, TransPoint, will be dissolved, with its assets being absorbed into CheckFree Holdings.
  • The deal is expected to be completed within four to six months, according to Ric Duques, chairman and CEO of First Data.
  • The combined company, CheckFree Holdings, will own 77 percent of the venture, with Microsoft, First Data, and Citibank owning a combined 23 percent.
  • The partnership will develop new bill-payment products and services to accelerate the adoption of electronic bill paying.
  • Peter Sinisgalli, president of CheckFree Holdings, believes the acquisition will "speed the acceptance of online bill paying" and provide a "critical mass of billers" to the market.
  • Ric Duques, chairman and CEO of First Data, stated that the deal will "ignite the market" and provide consumers with access to a larger number of companies for online bill payments.

Statistics:

  • The acquisition is worth approximately $1.16 billion.
  • 17 million shares of CheckFree Holdings stock will be issued to Microsft, First Data, and Citibank.
  • The company's stock closed at $68.25 on the day of the announcement.
  • The deal is expected to be completed within four to six months.
  • CheckFree Holdings will own 77 percent of the combined company.
  • Microsoft, First Data, and Citibank will own a combined 23 percent of the company.
  • The partnership between CheckFree Holdings, Microsoft, First Data, and Citibank will aim to develop new bill-payment products and services.

Sources:

  • Article: "CheckFree Holdings to buy a rival, speed online bill paying"
  • Source not specified