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Fidelity National Financial, Inc. and Certegy Inc. Announce Combination of
Fidelity National Information Services, Inc. and Certegy Inc.
Fidelity National Financial, Inc., (NYSE:FNF) and Certegy Inc. (NYSE:CEY)
today announced the signing of a definitive Merger Agreement under which
Fidelity National Information Services, Inc. ("FIS"), a majority-owned
subsidiary of Fidelity National Financial, Inc. and Certegy Inc.
("Certegy") will combine operations to form a single publicly traded
entity. Under the terms of the Merger Agreement, FIS and Certegy will be
combined in a tax-free, stock-for-stock merger under which each share of
FIS common stock will be exchanged for 0.6396 shares of Certegy common
stock. After the issuance of Certegy stock to FIS shareholders, current
Certegy shareholders will own approximately 32.5% and FIS shareholders will
own approximately 67.5% of the combined entity, with FNF directly owning
approximately 50.3%. Additionally, Certegy will pay a $3.75 per share
special cash dividend to its shareholders prior to the closing of the
transaction.
FIS is a leading provider of core financial institution processing, mortgage
loan processing and related information products and outsourcing services
to financial institutions, mortgage lenders and real estate professionals.
FIS' software processes nearly 50 percent of all U.S. residential
mortgages, it has processing and technology relationships with 45 of the
top 50 U.S. banks, more than 2,800 small and mid-sized U.S. financial
institutions and clients in more than 50 countries who rely on its
processing and outsourcing products and services. Certegy is a leading
provider of credit, debit, check risk management and cash access services
to over 6,500 financial institutions and 100,000 retailers. Certegy
maintains a global presence with operations in the United States, the
United Kingdom, Ireland, France, Chile, Brazil, Australia, New Zealand,
Thailand and the Caribbean.
The name of the combined company will become Fidelity National Information
Services, Inc. and it is expected to have its shares of common stock trade
on the New York Stock Exchange under the trading symbol 'FIS'. The
headquarters for the combined company will be in Jacksonville, Florida. FNF
Chairman and Chief Executive Officer William P. Foley, II will also serve
as Chairman of the Board of Directors of FIS. The FIS Board of Directors
will consist of ten directors, with four directors from the current FIS
board, including its Chairman William P. Foley, II, four directors from the
current Certegy board, including its current Chairman Lee A. Kennedy and
one director from each of Thomas H. Lee Partners and Texas Pacific Group.
Mr. Kennedy will also become the Chief Executive Officer of the new FIS.
Additionally, FNF Chief Financial Officer Alan L. Stinson will become
Executive Vice President and Chief Financial Officer of the new FIS, in
addition to retaining his role as Chief Financial Officer of FNF. FNF will
consolidate the results of FIS in its financial statements and record
minority interest for the portion of FIS that it will not own.
"We believe this is a combination that truly will benefit both organizations,
as the new FIS will be uniquely positioned to offer a broad suite of data
processing, payment and risk management services to financial institutions
and retailers," said FNF Chairman and Chief Executive Officer William P.
Foley, II. "Our businesses are complementary, rather than competitive and
we believe there are some very significant and unique revenue synergy
opportunities, particularly in the community bank, credit union and
international markets. We also believe there are meaningful cost synergies
to be recognized by eliminating many redundant and duplicative functions
through the combination of the two organizations. The new FIS will have
nearly $4 billion of diversified, run-rate revenue and $1 billion of
run-rate EBITDA from market leading businesses and will be well positioned
to capitalize on the significant and unique growth opportunities that the
combined companies can offer the markets we serve."
"We are very excited to become part of the FNF family," said Lee A. Kennedy,
Certegy Chairman and Chief Executive Officer. "This combination creates one
of the largest financial institution technology processing and services
companies in the world. It provides Certegy with the opportunity to
significantly increase the depth and breadth of products and services that
we offer to the domestic community bank and credit union markets, as well
as our international customers. It also provides a potential entry point
with larger financial institutions through FIS' large bank processing
relationships. We expect this combination to provide significant value for
our existing Certegy shareholders, including both the $3.75 per share
special cash dividend and the expected accretion to trailing twelve months
cash earnings per share of 16%."
The transaction is subject to a variety of conditions, including the
effectiveness of a proxy statement for a Certegy stockholder vote, Certegy
stockholder approval, all necessary regulatory approvals and other
customary closing conditions.
A conference call to discuss this transaction will be held at 10:00 a.m.
Eastern Time this morning, September 15, 2005. Those wishing to participate
via the webcast should access the call through FNF's Investor Relations
website at www.fnf.com or Certegy's Investor Relations website at
www.certegy.com. A PowerPoint slide show presentation that will be utilized
during the conference call will be available for viewing at both the FNF
and Certegy Investor Relations websites at the beginning of the conference
call. Those wishing to participate in the conference call via the telephone
may dial-in at 800-762-4717 (USA) or 480-629-9025 (International). The
conference call replay will be available via webcast through FNF's Investor
Relations website at www.fnf.com and Certegy's Investor Relations website
at www.certegy.com. The telephone replay will be available from 1:30 p.m.
Eastern Time on September 15, 2005 through September 29, 2005 by dialing
800-475-6701 (USA) or 320-365-3844 (International). The access code will be
796082.
In connection with the proposed Merger, Certegy will file a proxy statement
with the Securities and Exchange Commission ("SEC"). The proxy statement
will be mailed to the shareholders of Certegy. CERTEGY'S SHAREHOLDERS ARE
URGED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a
free copy of the proxy statement (when available) and other documents filed
by Certegy with the SEC at the SEC's web site at www.sec.gov. In addition,
investors and security holders may obtain free copies of the documents
filed with the SEC by Certegy by going to Certegy's Investor Relations page
on its corporate website at www.certegy.com.
Certegy, FNF, and their respective officers and directors may be deemed, under
SEC rules, to be participants in the solicitation of proxies from Certegy's
shareholders with respect to the Merger. A description of any interests
that any such participant may have in the Merger will be available in the
proxy statement. Information concerning FNF's directors and executive
officers is set forth in FNF's proxy statement for its 2005 annual meeting
of stockholders, which was filed with the SEC on April 28, 2005, and its
annual report on Form 10-K filed with the SEC on March 16, 2005. These
documents are available free of charge at the SEC's web site www.sec.gov or
by going to FNF's Investor Relations page on its corporate website at
www.fnf.com.
Fidelity National Financial, Inc., number 261 on the Fortune 500, is a provider
of products and outsourced services and solutions to financial institutions
and the real estate industry. FNF had total revenue of nearly $8.3 billion
and earned more than $740 million in 2004, with cash flow from operations
of nearly $1.2 billion for that same period. FNF is the nation's largest
title insurance company, with nearly 31 percent national market share, and
is also a provider of other specialty insurance products, including flood
insurance, homeowners insurance and home warranty insurance. Through its
majority-owned subsidiary FIS, FNF is a leading provider of technology
solutions, processing services and information services to the financial
services and real estate industries. FIS' software processes nearly 50
percent of all U. S. residential mortgages, it has processing and
technology relationships with 45 of the top 50 U.S. banks and more than
2,800 small and mid-sized U.S. financial institutions and it has clients in
more than 50 countries who rely on its processing and outsourcing products
and services. FIS also provides customized business process outsourcing
related to aspects of the origination and management of mortgage loans to
national lenders and servicers. FIS offers information services, including
property data and real estate-related services that are used by lenders,
mortgage investors and real estate professionals to complete residential
real estate transactions throughout the U.S. More information about the FNF
family of companies can be found at www.fnf.com and
www.fidelityinfoservices.com.
Certegy Inc. provides credit and debit processing, check risk management and
check cashing services, merchant processing and e-banking services to over
6,500 financial institutions, 100,000 retailers and 100 million consumers
worldwide. Headquartered in St. Petersburg, Florida, Certegy maintains a
strong global presence with operations in the United States, United
Kingdom, Ireland, France, Chile, Brazil, Australia, New Zealand, Thailand
and the Caribbean. As a leading payment services provider, Certegy offers a
comprehensive range of transaction processing services, check risk
management solutions and integrated customer support programs that
facilitate the exchange of business and consumer payments. Certegy
generated over $1.0 billion in revenue in 2004. For more information on
Certegy, please visit www.certegy.com. This press release contains
statements related to future events and expectations, which include
statements about revenue and cost synergies and earnings accretion and, as
such, constitutes forward-looking statements. These forward-looking
statements are subject to known and unknown risks, uncertainties and other
factors that may cause actual results, performance or achievements of FIS
and Certegy to be different from those expressed or implied above. FNF and
Certegy expressly disclaim any duty to update or revise forward-looking
statements. The risks and uncertainties which forward-looking statements
are subject to include, but are not limited to, the effect of governmental
regulations, the economy, competition, the risk that the merger may fail to
achieve beneficial synergies or that it may take longer than expected to do
so, the risk of reduction in revenue from the elimination of existing and
potential customers due to consolidation in the banking, retail and
financial services industries, potential overdependence on a limited number
of customers due to consolidation in the banking, retail and financial
services industries, failure to adapt to changes in technology or in the
marketplace and other risks detailed from time to time in the Form 10-K and
other reports and filings made by FIS and Certegy with the Securities and
Exchange Commission.
SOURCES: Fidelity National Financial, Inc. and Certegy Inc.
CONTACTS: Fidelity National Financial, Inc. - Daniel Kennedy Murphy, Senior
Vice President, Finance and Investor Relations, 904-854-8120,
dkmurphy@fnf.com; Certegy Inc. – Mary K. Waggoner, Senior Vice President,
Investor Relations, 678-867-8004, mary.waggoner@certegy.com
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The Dallas NTS office is part of the Fidelity National Title Services
Division, a select group of offices specifically designed to facilitate
complex commercial real estate transactions nationwide. The NTS mission is
to provide our clients with superior service and security through a single
point of contact, regardless of the property location.
Our clients
include a wide variety of commercial developers, investors, REITs,
attorneys, lenders and corporate real estate users. Combining over 250
years of title experience, our escrow, underwriting and sales professionals
are dedicated to providing the industry's most comprehensive range of
services... including the smile.
Fidelity National Title Insurance Company
717 North Harwood Street Suite 800 Dallas, Texas 75201
214-969-5300 dmccallum@fnf.com
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