A release from the companies said Goldleaf will become a wholly-owned subsidiary of Jack Henry, and Goldleaf's shareholders will receive $0.98 per share in cash in exchange for their shares, representing a premium of approximately 40 percent over Goldleaf's closing share price on August 14, 2009. In addition, Jack Henry will retire certain of Goldleaf's outstanding debt and accrued interest obligations, which is anticipated to equal approximately $42 million at closing.
Jack Henry's technology solutions serve more than 8,800 customers nationwide and Goldleaf provides its strategic suite of integrated technology and payment solutions to more than 3,500 financial institutions worldwide. According to the companies, they have complementary business models and share many mutual customers.
Aite Group senior analyst Nancy Atkinson commented on the acquisition in a statement. "By acquiring Goldleaf Financial Services, Jack Henry is building bulk in terms of number of clients, items processed, and in a few cases, capabilities. In particular, Goldleaf's LendingNetwork brings receivables financing and leasing to Jack Henry, among other financing functions not normally associated with an IT vendor. This acquisition like ProfitStars before it, opens up new markets for Jack Henry," she said.
Atkinson also looks at the move as part of a larger trend begun with the merger of Metavante (Milwaukee) into Fidelity National Information Services (Jacksonville, Fla.).
"The Fidelity National Information Services acquisition of Metavante positioned the combined entity as a significant competitor to Fiserv," Atkinson noted. "The remaining U.S.-based core banking providers — Jack Henry, Harland Financial, and Open Solutions — were put on notice that the game is changing. Further, large IT companies that used to focus only on the largest financial institutions are now moving down market and competing with core processors."
The Goldleaf board of direction unanimously approved the merger and is urging shareholders to do the same, as the deal is still subject to their approval. If the companies receive the green light, the deal should close at the end of the third quarter or start of the fourth quarter.