Fiserv expects to receive approximately $515 million in net after-tax proceeds and to retain a 49 percent equity interest in Fiserv Insurance Solutions. The transaction is anticipated to close in July 2008, subject to regulatory approval and other customary closing conditions. The transaction will impact nearly all of Fiservâs Insurance segment. The current management team and employee base will continue with the company, which will be known as Fiserv Insurance Solutions, Inc.
âStone Point Capital brings a proven track record of Insurance industry success that we believe will accelerate the growth opportunities for Fiserv Insurance Solutions and its clients,â said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. âWithin Fiserv, we are able to free up capital, maintain an interest in Fiserv Insurance Solutions that should increase in value, and intensify our focus on delivering products and services within the broad financial services and payments landscape.â
âWe are delighted to partner with Fiserv and the management team of Fiserv Insurance Solutions,â said Chuck Davis, Chief Executive Officer of Stone Point Capital. âFiserv Insurance Solutions is a leading player in the insurance technology and outsourcing space. We believe there are a number of exciting growth opportunities for the business, and we look forward to working with the Fiserv Insurance Solutions management team to pursue these growth initiatives as an independent company focused on serving the insurance marketplace. We are also pleased that Fiserv will be continuing its involvement, through a significant minority ownership position, which we believe will further enhance the companyâs prospects for success.â
Stone Point Capital and its predecessor operations have a 20-year history of successful investing in the global insurance and financial services industries. Stone Point Capital primarily targets investments in the insurance and financial services industries, including insurance underwriting, distribution and services, benefits and healthcare, asset management and retirement savings, and banking and depository institutions.
âStone Point Capitalâs business philosophy and culture match our own,â said Mark Damico, president and CEO of Fiserv Insurance Solutions. âThe entire Fiserv Insurance Solutions management team is excited to go to market with a partner with deep insurance sector expertise. Stone Point Capital recognizes our commitment to employees as well as clients and, through our partnership, we will continue to provide innovative solutions for years to come.â
âOver the last year, Fiserv has assembled a powerful combination of products and services to better serve our clients,â added Yabuki. âGoing forward, we are focused on delivering unique value through innovative technology solutions and product integration. Additionally, we will seek opportunities to bolster our payments and transaction processing capabilities â organically and through acquisition â which enhance our overall market position.â
Fiserv expects to receive approximately $515 million of net transaction proceeds and expects slight 2008 earnings dilution of $0.02 to $0.04 per share or approximately 1 percent depending upon reinvestment of the net proceeds. In connection with the sale, Fiserv also re-affirmed its 2008 adjusted earnings per share guidance of $3.28 to $3.40 from continuing operations. Fiserv expects the transaction to be accretive to its long-term revenue, earnings and margin growth rates.
Upon closing the transaction, Fiserv will no longer consolidate revenue and expenses from Fiserv Insurance Solutions. Due to the sale of its majority interest, the company will report its 49 percent share of net earnings in Fiserv Insurance Solutions on a single income statement line item, which is anticipated to begin in Fiservâs third quarter earnings announcement.
In a related action, the Fiserv Board of Directors authorized the repurchase of up to an additional 10 million shares of Fiserv common stock.