CheckFree Investment Services Announces Acquisition of the Mobius Group; Broadens Suite of Investment Services Solutions
ATLANTA, March 8 /PRNewswire/ -- CheckFree Holdings Corporation (Nasdaq: CKFR - news) today announced that its Investment Services Division has acquired privately held Mobius Group, a leading provider of money manager databases and financial planning software to the financial services industry. CheckFree paid approximately $18 million in an all-stock transaction that closed today. The Mobius Group, which generated revenue of $6.6 million in 1998, will allow CheckFree Investment Services to offer the broadest suite of investment consulting services and products in the industry today. (CheckFree's Electronic Commerce division continues to work with Mobius Management Systems, Inc. which is in no way related to the Mobius Group.)
The addition of the Mobius Group immediately broadens the range of services that CheckFree can provide brokers, investment consultants and asset managers. Investment consultants and asset managers will be able to use M-Vest to determine the ideal asset allocation, use M-Search to determine the ideal investment manager candidates, use CheckFree APL and APL Wrap products to provide the investment management platform and trading tools, and use either M-Watch or CheckFree APL for their investment oversight and reporting to the end client. Financial institutions offering managed account products can now go to one source for all of their analysis, oversight and reporting needs.
The M-Preps, Leonard and soon-to-be released M-Plan financial planning systems will allow CheckFree immediate entry into the financial planner marketplace, a segment of the financial services industry it has not previously served. Financial planning is an increasing part of services being provided to individual investors and these systems will further broaden the comprehensive product offerings.
''The addition of the Mobius Group is a clear fit with our two major strategic objectives of expanding services to our existing client base and moving our portfolio management and reporting services down market to financial planners, high net worth consumers and eventually all consumers,'' said Frank Polashock, General Manager of CheckFree Investment Services. ''We will continue to expand our product and service capabilities through development, partnerships and such strategic acquisitions as the Mobius Group, to meet and anticipate the needs of our growing client base.''
''Since the inception of the Mobius Group 10 years ago, we have had a vision of providing our clients with a complete suite of decision tools,'' said Bob Padgette, president of the Mobius Group. ''Until today we were missing a major part of that vision -- portfolio accounting. With the merger of the Mobius Group into CheckFree Investment Services, this powerful combination will offer integrated, comprehensive products to our brokerage firm, money manager, consultant, plan sponsor, and financial planning clients, making us an integral part of their continued success.''
Bob Padgette, founder and CEO of the Mobius Group and the 70 employees of the company join CheckFree's Investment Services division and will maintain the current facility in Research Triangle Park, N.C. The Mobius Group has more than 1,700 clients, including many of the world's leading financial institutions.
''The transaction will provide strong return-on-investment for CheckFree, and excluding the effects of approximately $2.5 million of annual non-cash amortization, will be two cents accretive in 2000 and four cents accretive in 2001,'' said Jim Douglass, Executive Vice President of Mergers and Acquisitions. ''Nonetheless, because our repurchase of 4.7 million shares last fall precludes us from applying the pooling method of accounting for this acquisition, the Company will be required to record the amortization for GAAP reporting purposes, resulting in one cent of earnings per share dilution in the fourth quarter and two cents in fiscal 2000. Thereafter, the deal is expected to be accretive,'' added Douglass. The Company also expects to record a charge in the third quarter of fiscal 1999 for in process research and development and other costs associated with the transaction.
About CheckFree
Founded in 1981, CheckFree (www.checkfree.com ), the operating subsidiary of CheckFree Holdings Corporation, is the leading provider of financial electronic commerce services, software and related products for more than 2.6 million consumers, 1,000 businesses and 850 financial institutions. CheckFree designs, develops and markets services that enable its customers to make electronic payments and collections, automate paper-based recurring financial transactions and conduct secure transactions on the Internet.
CheckFree Investment Services offers CheckFree APL and CheckFree APL WRAP, which include portfolio accounting, performance measurement, trading and reporting services to financial institutions. CheckFree APL and CheckFree APL WRAP are currently used by more than 225 institutions managing over 600,000 portfolios totaling more than $400 billion in assets.
SOURCE: CheckFree Holdings Corporation
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