* Deal for $6.62 in cash and 0.1064 ACI shares per S1 share
* Transaction approved by boards of both companies
* S1 shares up 2 pct; ACI stock falls 5 pct
(Adds share movement)
By Brenton Cordeiro and Tanya Agrawal
Oct 3 Financial technology provider ACI
Worldwide Inc scooped up smaller rival S1 Corp
for $515.9 million, after sweetening the deal for the third time
in three months.
The deal will help ACI broaden its product offering and
compete strongly with other mid-tier financial technology
companies like Jack Henry & Associates , DST Systems
and Fundtech .
The combined company will have a complementary
suite of products that will better serve the entire spectrum of
financial institutions, processors and retailers, ACI Chief
Executive Philip Heasley said in a statement.
ACI, which had launched a hostile bid for S1 through a
tender offer, said it will amend its pending exchange offer to
reflect the terms of the definitive agreement.
"I think it allows ACI to get this deal done smoothly. They
did not want a protracted battle and it was not going to help
anybody," said John Kraft from DA Davidson.
"This saves face for the S1 board and it's sort of a
The tender offer had not received enough interest from S1
shareholders initially, prompting ACI to extend the deadline for
the offer expiration.
Under the agreement, ACI will pay $6.62 per share in cash
and 0.1064 shares of its common stock to S1 shareholders,
valuing the deal at $9.55 a share as of Sept 30. ACI had earlier
offered $6.20 in cash and 0.1064 in ACI shares per S1 share.
"With significant improvements in the transaction terms and
conditions, S1's board unanimously concluded that combining with
ACI is in the best interests of S1's stockholders," said S1
Chairman John Spiegel.
S1, which had so far opposed a merger with ACI, said its
board recommended that its stockholders tender shares into the
"This deal is going to be a challenging integration, but the
big step today is that they now have the support of the S1
management," Wedbush's Gil Luria said.
S1 had initially planned to buy Israeli-based Fundtech,
before ACI made its bid for S1. Fundtech ultimately dumped S1's
offer, opting instead to be bought by private equity firm GTCR.
S1 shares climbed 2 percent to $9.27, while those of ACI
were down 5 percent at $26.14 in morning trade on Monday on
(Reporting by Brenton Cordeiro and Tanya Agrawal in Bangalore;
Editing by Anil D'Silva)