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Technology Stocks : CheckFree Holdings Corp. (CKFR), the next Dell, Intel? -- Ignore unavailable to you. Want to Upgrade?

To: StocksMan who wrote (20248)	7/12/2004 11:18:50 AM
From: Bruce Prescott	Respond to of 20297

Motley Fool CheckFree Woos Wachovia Friday July 9, 11:11 am ET By Nathan Slaughter I admit it; technology sometimes scares me. My wife programs the VCR (we're still years away from digital video recorders such as TiVo (Nasdaq: TIVO - News)), my year-old son is far more accomplished with the stereo remote control, and I still have a fondness for Microsoft (Nasdaq: MSFT - News) DOS, even though this newfangled Windows thing seems to be catching on. Still, even I manage to pay many of my bills online. The behind-the-scenes company enabling this wonderful innovation, electronic-billing pioneer CheckFree (Nasdaq: CKFR - News), moved sharply higher yesterday after announcing a multiyear contract extension with Wachovia (NYSE: WB - News). Under the agreement, Wachovia's entire retail and small-business customer base will transition to CheckFree's electronic billing and payment processing platform. As the nation's fourth-largest bank, Wachovia and its business represent a considerable opportunity, even for a market leader such as CheckFree, which handles online-billing transactions for Bank of America (NYSE: BAC - News), Yahoo! (Nasdaq: YHOO - News), and more than 1,200 other organizations. The company, which has been up and running since 1981, finally achieved its first period of GAAP profitability last quarter, a breakthrough that Rich Smith predicted back in January. Fiscal third-quarter earnings swung to a $7.7 million gain ($0.08 per share) from a $7.8 million loss the year before, on total revenues of $155.2 million. More importantly, free cash flow topped $100 million through the first three fiscal quarters and is expected to outpace by double digits the $133.5 million churned out last year. Last quarter, CheckFree processed more than $150 million in electronic transactions from a customer base 13 million strong. Both metrics should continue to experience steady growth, provided no large-scale banking trends away from outsourcing in favor of in-house solutions emerge. Currently, traditional and Internet-based banks are a major ally. They encourage the use of online bill-paying services, fully aware that once customers go to the trouble of signing up, they are not likely to take their business to a competing bank. Once more consumers discover that billing transactions can be placed securely and reliably over the Internet without the hassle of stamps, envelopes, and late fees, CheckFree's volume will swell. With the necessary infrastructure already in place, operational leverage should ensure that much of this growth is translated into higher earnings going forward. CheckFree's enviable position comes at a premium, however, and any missteps along the way could be costly. Fool contributor Nathan Slaughter's former co-worker's friend's wife once worked for Wachovia, but he owns none of the companies mentioned.

To: StocksMan who wrote (20248)	7/13/2004 8:09:01 AM
From: Charlie Smith	Read Replies (1) \| Respond to of 20297

any ideas on what this means for CKFR: Press Release Source: Bank of America Bank of America to Acquire National Processing, Inc. Tuesday July 13, 8:02 am ET Industry ranking increases to #2 bankcard merchant acquirer CHARLOTTE, N.C., July 13 /PRNewswire-FirstCall/ -- Bank of America today announced a definitive agreement to purchase all of the outstanding shares of National Processing, Inc. for $1.4 billion in cash, or $26.60 per share. ADVERTISEMENT The combination with Bank of America Merchant Services would create the nation's second largest bankcard merchant acquirer with nearly $250 billion in annual processing volume. National Processing, a public company, is 83 percent owned by National City Corporation. The newly combined Bank of America Merchant Services will be headquartered in Louisville, KY, where National Processing is currently based. "Bank of America is the number one check processor in the U.S.," said G. Patrick Phillips, president, Card Services & e-Commerce, Bank of America. "This acquisition will better position the combined units to deliver a broader suite of payment solutions as transactions migrate from cash and checks to electronic payments." Phillips noted that Bank of America is the number one debit card issuer and number four credit card issuer in the United States, uniquely positioning the company to innovate and create efficiencies in electronic payments. Through its Merchant Card Services unit, National Processing provides services to approximately 700,000 merchant locations across North America, representing nearly one out of every six VISA® and MasterCard® transactions processed nationally. National Processing also provides financial settlement and reporting solutions to large and mid-size corporate customers in the travel and healthcare industries. "Bank of America is committed to a seamless transition for National Processing clients," said Phillips. "Our focus is to expand this business and offer these clients even greater value through the broad range of capabilities we have. Bank of America merchant clients will also benefit." "This transaction will allow Bank of America to compete more effectively in the electronic payments business by creating immediate scale through National Processing's customer base and by using that company's technology platform to drive growth and improve servicing capabilities for both national and regional merchant clients," he explained. National Processing has a seasoned, talented team that will blend well with Bank of America's merchant services group, Phillips said. Bank of America also announced that Mark Pyke, currently the Chief Operating Officer of National Processing, Inc., will lead the combined merchant services business once the transaction is complete. Pyke will report directly to Pat Phillips. Jon L. Gorney, National Processing chairman and chief executive officer, said the sale resulted from a review of various strategic alternatives undertaken by the company's Board of Directors and is supported by the company's majority owner, National City Corporation. "We believe that the sale agreement with Bank of America is in the best interests of the company and its shareholders," Gorney said. Gorney noted that National City is focusing on strategic growth in its core banking business, including expansion in the Chicago region and acquisitions in St. Louis, Cincinnati and northern Ohio. The merger is subject to the approval of National Processing, Inc. shareholders, regulatory approvals and other customary conditions, and is expected to close in the fourth quarter of 2004. Morgan Stanley acted as financial advisor to National Processing, Inc. in the transaction and provided a fairness opinion.