RealTime IT News

CheckFree Now in Digitizing Business

Financial e-commerce services provider CheckFree Corp. today announced an agreement to purchase Carreker Corp. for its software technology and consulting business.

CheckFree said Carreker's expertise in capturing the digital image of a paper check will enable the newly combined organization to convert paper checks into electronic data at an earlier point in the payments process.

According to a statement, CheckFree will acquire all outstanding shares of Carreker common stock at a price of $8.05 per share, for a total purchase price of approximately $206 million on a fully diluted basis.

The proposed acquisition is subject to regulatory review, Carreker shareholder approval, and other customary closing conditions, but it is expected to close by March 31. CheckFree will finance the transaction with a combination of existing cash balances and revolving debt.

Carreker Chairman and CEO John D. Carreker called the acquisition the "positive outcome" of his company's year-long strategic review.

It's a positive turn for CheckFree, too.

The last big news from the company came in March 2002 when the tech boom was well into its bust and heavy investments in e-commerce often meant heavy losses.

That month, CheckFree closed four offices and cut 450 jobs only weeks after sacking 100 employees in its shuttered San Francisco office. For the fiscal year ending June 30, 2001, the company lost $363 million.

But if that kind of hemorrhaging is bad for business, then growth is good and so is this news.

With the buy, CheckFree said it gained more than 250 clients in the United States, United Kingdom, Ireland, Continental Europe, South American and Australia. Carreker also reported revenues of $116.6 million in fiscal 2005, which ended Jan. 31, 2006.