The last major independent provider of bill pay to credit unionshas been purchased by its biggest customer, but its president saidit's business as usual for his customers and end users.

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iPay Technologies of Elizabethton, Ky., was sold last week bySpectrum Equity Investors and Bain Capital Ventures to Jack Henry& Associates of Monett, Mo., for $300 million in cash, with thedeal expected to close in June.

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The acquisition is the largest yet for Jack Henry, perhaps bestknown in the credit union industry as the owner of the Symitar coreprocessing platform. It follows Fiserv's acquisition of CheckFreefor $4.4 billion in 2007 and FIS's purchase of MetavanteTechnologies for $2.94 billion last year.

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iPay employs about 250 people and provides bill pay and relatedservices to more than 3,600 credit unions and other financialinstitutions, including more than half of the credit unions andnearly 40% of the community banks that use bill payment software,the company said.

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Jack Henry has a client list of more than 11,800 that it servesthrough three primary brands, core processors Jack Henry Bankingand Symitar and its ProfitStars division for specialized productsand services. About 1,075 of those are users of the iPay bill payengine through Jack Henry's online platforms.

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A company spokeswoman said she could not comment on how iPaywould be integrated into the company until after the purchase isfinal.

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iPay's president, Bill Ready, said, “We see this very much asbusiness as usual, and we'll continue to serve our customers in thesame way that we always have, with the same people here for them tocall and us calling on them.”

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iPay Technologies was created in 2001 with about 150 clientcontracts purchased from a predecessor that disbanded after thedot-com implosion of 2000. It then grew through partnerships withcore processors, aggregators and other services providers, perhapsmost notably its November 2007 deal to be the payment engine forJack Henry's electronic bill pay solution, NetTeller PowerPay,which essentially doubled its potential client base.

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“iPay operates as a seamless extension of its business partnerswith a sophisticated bill pay engine that easily integrates withany online banking solution,” said Jack Henry CEO Jack Prim. “Thisis a key acquisition that supports our expansion in the electronicpayments industry and further strengthens our paymentsoffering.”

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Jack Henry's chief financial officer, Kevin Williams, added that“iPay Technologies, which is our largest acquisition to date, addedproven solutions that complement our existing products andservices, expands our presence and potential in the growingpayments industry, broadens our reach outside our core client basewith a highly competitive online bill pay solution, and increasesour transaction-based and recurring revenues.”

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Ready, the iPay president, said, “There remains a lot to be seenbut we don't see this as the end of an era. Our culture fit withJack Henry has been very strong and we see this as a naturalevolution of that process.”

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That reflected the view of industry observer Gwen Bezard,research director at Aite Group in Boston.

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“iPay was one of the last of the independent big paymentprocessors. and I would say it's a natural evolution for it to beacquired by a core banking processor,” he said. “It's a logicalpass. If I were a client of iPay, I wouldn't be concerned at all bythis acquisition.”

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