Netzee Targets Big Banks with Buy
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Netzee Inc. Monday took aim at the mid- to large-sized financial institution market by scooping up John H. Harland Co.'s Internet banking and bill payment businesses for about $16.8 million.
Netzee swapped 4.4 million shares of Netzee common stock for the financial software maker. Harland, which loaned Netzee $5 million, will have a 17 percent ownership interest in Netzee.
As a result, Netzee will be better armed to service major online banks because it is adding Harland's consumer banking, personal branch and bill payment Internet banking products businesses, all of which Harland won when it acquired Concentrex in August.
Netzee claims that it will be one of the largest Net banking specialists in the U.S. when the play closes by the end of the month. Netzee will have more than 800 financial institutions under contract with more than 700 actually installed on one of its online banking products as well as having 700,000 e-tail customers to service.
Sturm, who said Netzee will now be in position to target mammoth banks in the $500 billion asset capital range, said Netzee will absorb somewhere between 170 and 200 employees who run Harland's financial services, which will just about double Netzee.
"We have been interested in forging a relationship with Harland for quite some time, and this acquisition became the ideal opportunity," said Sturm, who also indicated that future synergies with Harland are on the horizon.
Founded in 1999 as a subsidiary of The InterCept Group Inc., Netzee
was up 8.2 percent in morning trading.