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ATLANTA – Known still to many credit unions as a check printer, the market the company started out in more than 70 years ago, John H. Harland Company through a string of acquisitions over the past several years has evolved and broadened its product and service offerings. Harland Financial Solutions, one of the company’s wholly-owned subsidiaries, is waging that its latest announced deal to acquire Bellevue, Wash.-based Interlinq Software Corp., a leading provider of mortgage origination and servicing software, will boost the company’s standing among credit unions and other financials as a leading provider of mortgage automation software. Harland Financial Solutions, according to a company release, announced August 6 that it signed a definitive agreement to purchase Interlinq for $6.25 a share. The total purchase price is expected to be approximately $34 million, including fees and expenses, less Interlinq’s cash balance of about $10 million. Harland expects the acquisition to close in the fourth quarter 2002, pending approval by Interlinq shareholders. Interlinq will be operated as a wholly-owned subsidiary of Harland Financial Solutions and will remain headquartered in Bellevue. Harland Financial Solutions President John O’Malley said the company had its first discussions with Interlinq about a possible acquisition about 18 months ago, but “the timing wasn’t right then,” he said. At the time, O’Malley explained, Interlinq was in the process of working on a browser-based version of its MortgageWareE3T lending platform. That product was announced in July. “Harland Financial Solutions’ acquisition of Interlinq takes us from a minority to a majority position in the mortgage origination technology market,” said O’Malley. According to Harland, Interlinq has over 1,300 customers and more than 20,000 individual users. He based his statement on market share data from a study conducted by Silver Springs, Md.- Mortech LLC, a leading provider of data on technology trends and implications in the mortgage industry. The data, said O’Malley, showed “Interlinq has about twice the market share as its next closest competitor in terms of mortgage origination users.” He said Mortech showed Fiserv occupying the number two slot. “Interlinq and Harland Financial Solutions share the same product direction vision. They have tremendous depth in the mortgage industry and have clearly demonstrated a level of competency in the market,” O’Malley said. O’Malley described Interlinq’s product line as being “scalable and affordable to lenders like credit unions.” In comparison, he said the SmartT suite of products, including Smart OriginationT, Smart SecondaryT and Smart Post ClosingT from mortgage technology firm Concentrex Inc., Portland, Ore. which Harland Financial acquired in 2000 was “better suited” for “very high volume originators like banks.” O’Malley said the “price tag on Concentrex’s products was out of range of most credit unions.” Although John H. Harland started out in the check printing business, O’Malley said, “The check printing business is a value oriented business. It is a very mature industry and not a high growth industry. Our strategy has been to use that cash flow to diversify and invest in higher growth businesses.” O’Malley did not name any specific companies Harland Financial Services is currently looking in to acquiring beyond Interlinq, but he offered that “we always have our sights set on possible acquisitions.” He added that, “There are opportunities out there every day. If a market opportunity presents itself, we will continue to make acquisitions.” -

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