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Payments-technology provider ACI Worldwide Inc. said it plans to sell its Community Financial Services (CFS) unit to bank processor Fiserv Inc. for $200 million in cash.
CFS, which provides online and mobile banking and payments and security services to community banks and credit unions, generated about 22% of ACI’s $1.02 billion in revenues in 2014. ACI said selling the unit will enable it to focus more closely on higher-growth businesses, including its Retail Decisions family of security services. ACI acquired CFS in 2012 when it purchased S1 Corp., a payments software-development firm.
“Exiting the community-bank and credit-union markets enables ACI to focus resources and energy on our strategic products and new high-growth initiatives,” said Phil Heasley, president and chief executive of ACI, in a press release.
Naples, Fla.-based ACI purchased Retail Decisions Plc, an online fraud-prevention company, in 2014, and followed that deal with its 2015 purchase of PAY.ON, an e-commerce payment gateway.
For its part, Brookfield, Wis.-based Fiserv says the deal, which is expected to close in the first quarter, aligns with the company’s other products and services. As part of the deal, Fiserv will get ACI’s Architect Banking, a platform that supports online, mobile, and tablet banking for retail banks and small-business customers. Other products included in the deal provide bill payment and security services.
The ACI deal to sell CFS to Fiserv makes a lot of sense, says Gil Luria, managing director of equity research at Wedbush Securities, a Los Angeles-based investment advisory firm.
“The Community Financial Services business was never a good fit for ACI, [which] has always been focused on selling to the largest banks,” Luria says in an email to Digital Transactions News. “While they tried to keep the business going since acquiring it as part of the acquisition of S1, they eventually decided to use the proceeds from the sale to focus more on their large bank customers and their growing retailer business. Fiserv has been operating in the community-bank arena very successfully for many years and will get the increased scale of adding this business.”
—With additional reporting by Jim Daly
