Online Resources Corp., one of the pioneers in online banking for credit unions, is being sold to ACI Worldwide.
The $126.6 million cash deal calls for ACI Worldwide to buy Chantilly, Va.-based ORCC for $3.85 per share. Buying ORCC’s preferred stock pushes the sticker price to about $263 million, ACI said Thursday.
The purchase price is an 83% premium over ORCC’s most recent closing price of $2.10 a share, and ACI said both companies’ boards have approved the offer.
The purchase was the second major takeover announced Thursday among major credit union technology providers joining the FIS buyout of mFoundry, and the third this month, following Fiserv Inc.’s purchase of Open Solutions Inc.
Fiserv and FIS are very large companies buying much-smaller competitors. The ACI-ORCC deal involves companies of roughly similar size and marks ACI’s second acquisition in the credit union space, following the 2011 purchase of S1 Corp., which itself had recently bought PM Systems, both providers of online banking and other e-commerce technology.
Founded in 1989 by Matt Lawlor, Online Resources has about 450 credit unions among its more than 1,000 client financial institutions and billers. The company processes more than 245 million bill payment transactions annually and its payments engine is connected to more than 9,000 billers.
ACI Worldwide said it provides electronic payments and banking for more than 1,650 financial institutions, retailers and processors around the world, including 14 of the leading global retailers, and 24 of the world's 25 largest banks.
“Built on our heritage of producing highly reliable and trusted solutions, ACI Worldwide’s mission is to deliver universal payment solutions that provide control, choice and flexibility to our customers while maintaining their peace of mind,” said Philip Heasley, president/CEO of the Naples, Fla.-based company.
“Online Resources’ robust product set and talented employee base of online banking and payment experts is well-aligned with this focus and our desire to lead in a category undergoing accelerating change,” Heasley said in a statement.
ORCC President/CEO Joe L. Cowan said, “I believe the combination of the two companies will allow the Online Resources product suite to now achieve its full potential in the banking and biller markets, provide even better services and functionality for our clients and customers, and create additional opportunity for our dedicated and hardworking employees.”
For the 12 months ending Sept. 30, 2012, the companies combined generated pro forma revenue of approximately $860 million and adjusted EBITDA of $182 million, ACI said in a statement, and the deal is being financed by a $300 million loan from Wells Fargo Bank.
In a letter to ORCC customers, Heasley said, “ACI is a global leader in payments, with customers in over 80 countries and 38 years of payments expertise. We are recognized as a leader in online banking – serving the corporate, business and consumer banking needs of large banks, community banks and credit unions. The online banking business has been a strategic focus of ACI since our acquisition of Politzer & Haney in 2006.
“ACI is committed to market-leading investment in our products, infrastructure and people. We apply more than 18% of revenue to R&D on an annual basis. We have a world-class global hosting organization. In addition, our support team is renowned for delivering the world class, 24x7x365 support that is essential to banking and payments. “
“Over the coming weeks, we expect to finalize the acquisition of Online Resources, allowing us to work closely with you as we build our plans for these market-leading solutions. During the next few months you should expect continued communications detailing these plans and roadmaps.”