The acquisition of Accurate demonstrates CheckFreeâs commitment to invest in the development and delivery of a comprehensive operational control framework to the worldâs leading financial institutions and corporations. The acquisition positions CheckFree Software as the global leader in operational risk management solutions that deliver greater control of financial transactions.
"Banks, securities firms and corporations are experiencing increasing operational complexity in an environment of closer regulatory scrutiny. As a result, these companies are actively seeking technology solutions that can help them realize operational efficiencies and more effectively manage risk," said Randy McCoy, executive vice president, CheckFree Corporation, and general manager of CheckFree Software. "CheckFreeâs products and experience, combined with Accurateâs talented team, international client base and proven solutions, will enable our customers to meet these increasingly global challenges. The addition of Accurate to CheckFree will accelerate speed-to-market of advanced operational risk management solutions, and deliver greater long-term value to our customers."
"When we founded Accurate in 1993, we shared a vision based upon three principles â expertise, innovation and true partnership," said Philip Hall, co-CEO and co-founder of Accurate. "These key strengths are highly compatible with CheckFreeâs management philosophy, software development approach and commitment to being a world-class organization."
"CheckFree brings financial resources and a commitment to the market that we believe will benefit our customers," said Nick Osborn, co-CEO and co-founder of Accurate. "We look forward to a very positive next chapter for our associates, customers and product evolution."
CheckFree and Accurate together will deliver best-in-class solutions that enable companies to dynamically manage, monitor and mitigate risk. These products will target bottom-line growth through increased operational efficiency and financial control. Accurateâs flagship platform, Accurate NXG, is SWIFTReady Gold accredited and has been implemented by leading financial institutions and corporations around the globe. For securities firms, the integration of CheckFree and Accurateâs products strengthens the companyâs end-to-end post-trade securities processing platform, all of which now incorporate SWIFTReady Gold-accredited technology. For banks, the integration of CheckFree and Accurateâs products creates a comprehensive operational risk control framework.
CheckFree and Accurate serve a combined worldwide customer base of more than 1,500 top-tier corporations across a range of industries in Europe, Asia Pacific and the United States, including banking, securities, insurance and retail. Accurate is based in Wokingham, England and has offices in Atlanta, New York, London, Luxembourg and Sydney, while CheckFreeâs locations outside the United States include Waterloo, Ontario, Canada; and London, Slough, Berkshire, and Rickmansworth, England. The addition of Accurate to CheckFree immediately strengthens the global presence of the organization and positions it for continued expansion in Europe and Asia Pacific. At the same time, CheckFree brings to Accurate strong financial resources to invest in the business and a commitment to innovation and quality that will benefit the combined customer base.
Both CheckFree and Accurate were recently recognized by industry research firms for their leadership in the reconciliation market. In April 2005, Financial Insights reported that CheckFree is one of three dominant U.S. industry players and the most dominant in the enterprise application market. The same report cites Accurateâs service, capabilities and growth rate as reasons for its place as a top reconciliation/exception management provider to watch for future leadership.
Update to Fourth Quarter and Fiscal 2005 Financial Outlook
For the fourth quarter of fiscal 2005 and fiscal year ending June 30, 2005, the acquisition of Accurate is expected to contribute revenue of about $3 million to CheckFree, be dilutive to GAAP earnings per share by about $0.02 per share due to charges associated with the close of the transaction, and be about neutral to underlying earnings per share. The company now expects fourth quarter revenue in the range of $197 to $202 million, and GAAP earnings per share in the range of $0.13 to $0.15, and continues to expect underlying earnings per share in the range of $0.37 to $0.39. For fiscal 2005, the Company now expects GAAP earnings per share in the range of $0.51 to $0.53, and continues to expect earnings per share on an underlying basis of $1.41 to $1.43. The company expects the Accurate acquisition to be neutral to modestly accretive to earnings per share for the fiscal year ending June 30, 2006.
The difference between GAAP (Generally Accepted Accounting Principles) and underlying earnings expectations for fiscal 2005 and the fourth quarter of fiscal 2005 is due to expected acquisition-related intangible amortization expense and a gain on the sale of investments, along with the related tax impact of each. See "Use of Non-GAAP Financial Information" below for a discussion of our use of non-GAAP financial measures such as underlying earnings per share.