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ACI scoops up S1 for $515.9 million in cash and stock deal

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Financial software maker ACI Worldwide (NASDAQ:ACIW) said on Monday that it has struck a deal to buy S1 Corp (NASDAQ:SONE) for $515.9 million to create a full-service financial and payments solution company.

Shares of ACI fell 4.43% to $26.32, while S1’s stock climbed 11 cents, or 1.20%, to $9.28 Monday.

Under the terms of the deal, ACI will buy S1 for $6.62 per share in cash and 0.1064 shares of its common stock for a blended value of $9.55 per share as of Sept. 30. That is up 42 cents from its previous offer made in Aug. On Aug. 25, ACI raised its cash component of its proposal from $5.70 to $6.20 per share.

ACI expects that with S1 will have annual cost synergies of about $30 million. The deal is expected to add to ACI’s full-year earnings and boost its margins.

In a statement, ACI’s CEO Philip Heasley said: "The combined company will have enhanced scale, breadth and additional capabilities, as well as a complementary suite of products that will better serve the entire spectrum of financial institutions, processors and retailers."

S1's Chairman John Spiegel said: "With the 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, as it provides a substantial premium for their investment and the opportunity to participate further in this powerful combination."

S1 Corp provides payments and financial services software solutions for automated teller machines, retailers as well as financial service solution for small business and corporate online banking, trade as well as call centre banking.

New York-based ACI Worldwide said the combined businesses will result in a full-service financial and payments solutions company with significant scale, and be well positioned to address both emerging and developed payments markets to serve retail banking, wholesale banking, processors and retailers.

ACI, which had launched its initial bid in July, said it will amend its pending exchange offer to reflect the terms of the definitive agreement.

S1, which snubbed ACI’s previous attempts to merge with the company, had initially planned to acquire Israeli-based Fundtech (NASDAQ:FNDT) but Fundtech kyboshed that deal after it received a superior bid from private equity firm GTCR for $352.7 million.
 
ACI said the transaction is subject to customary closing conditions and regulatory approval.

Quick facts: ACI Worldwide Inc

Price: 25.47 USD

NASDAQ:ACIW
Market: NASDAQ
Market Cap: $2.96 billion
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