S1 Corporation and Fundtech Ltd. agreed to combine businesses through a stock-for-stock merger, in a effort to boost transaction banking solutions.

Under the terms of the agreement, Fundtech shareholders will receive 2.72 shares of S1 common stock for each Fundtech ordinary share they own. Based on the stock prices at market close on June 24, 2011 for both S1 and Fundtech, the merger is valued at approximately $700 million. Upon closing of the transaction, S1 shareholders will own approximately 55% and Fundtech shareholders approximately 45% of the combined company.

As a result of the merger, the companies anticipate annualized pretax cost savings of approximately $12 million by the end of 2012 and fully realizable in 2013.

The combined company will be headquartered at S1's headquarters in Atlanta and will be called Fundtech. Reuven BenMenachem will serve as executive chairman of the combined company and Johann Dreyer will serve as CEO. The combined company will have an eight-member board composed of existing directors from both companies. The board will have equal representation, with four directors each nominated by S1 and Fundtech.

"The S1 and Fundtech organizations and cultures are very similar in their commitment to deliver innovative products and generate the highest levels of customer satisfaction. The companies have complementary product offerings and extensive cross-selling opportunities which will position the combined company to secure larger contracts and cultivate more strategic relationships with customers," said BenMenachem.

"The future of the transaction banking industry is highly dependent upon innovation and state-of-the-art solutions and this combination will put us at the forefront of these advancements," said Dreyer. "This merger will expand our geographic footprint and enhance our ability to accelerate revenue growth and increase profitability."

S1 is a global provider of payments and financial services software solutions to more than 3,000 financial institutions in more than 75 countries. Fundtech is a global provider of software solutions and services that facilitate payments, settlement, and cash management for more than 1,000 financial institutions in more than 70 countries.

 

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