The two vendors hope that by coming together they will be able to offer tighter integration between electronic banking, billing, payment and service support functionality, while also providing their customers with more technology choices.
Corillian’s online banking platform is used by 30 banks and 21 credit unions in the the US. CheckFree’s business is complementary in that it processes 1 billion transactions per year and distributes 18 million e-bills per month.
CheckFree is on a banking software related spending spree, having started the $206m acquisition of Carraker Corp in January. Carraker provides banks and financial institutions with software designed to capture paper check images at any point in the payment process in order to help automate the processing of captured documents.
Where Carreker expanded CheckFree’s payment processing business, Corillian takes it into the new area of online banking, however it is doing so at a time when banking platform providers, like Misys, are struggling.
It must be hoping that its focus on online and electronic transactions coupled with the ability to support end to end payment processing will give it the edge, particularly where banks are keen to improve the end user customer experience.
With a substantial proportion of banks planning to replace or refurbish their core banking systems over the next two years CheckFree is also aiming to driving revenue by tapping into a growth area.
The Corillian transaction is subject to regulatory and shareholder approval and is expected to around June 01, 2007. The deal is being financed through existing cash balances and revolving debt, and is expected to be dilutive to CheckFree’s GAAP earnings per share in the current fiscal year which ends on June 30, 2007.
