8-KMaterial AgreementsExhibits & Filings

FISERV INC 8-K Report, Material Agreement (May 25, 2007)

Filed May 25, 2007For Securities:FISV

Summary

Fiserv, Inc. (FISV) announced on May 24, 2007, its definitive agreements to sell its Fiserv Investment Support Services operations in two separate transactions. This move signals a strategic shift for the company, divesting a segment to potentially focus on core areas or redeploy capital. The divestitures are subject to customary closing conditions, including regulatory approvals, with an expected completion by year-end 2007. The sale involves two distinct parts. The larger transaction is with TD AMERITRADE, which will acquire Fiserv Trust Company and related institutional retirement plan and advisor services for $225 million in cash, plus up to $100 million in contingent consideration tied to revenue targets. Fiserv will also receive reimbursement for net capital and withdraw excess capital. The second transaction is with an entity controlled by Robert Beriault, a current Fiserv executive, for the remaining investment support services, including back-office and custody services for individual retirement accounts, for approximately $50 million in cash. Fiserv will retain a minority preferred share interest in this latter business.

Key Highlights

  • 1Fiserv is divesting its Investment Support Services operations through two separate sale agreements.
  • 2TD AMERITRADE is acquiring Fiserv Trust Company and related services for $225 million cash upfront, plus up to $100 million in contingent consideration.
  • 3A separate sale to an entity controlled by Robert Beriault is for approximately $50 million in cash for the remaining investment support services.
  • 4The transactions are expected to close by the end of 2007, subject to regulatory approvals.
  • 5Fiserv will provide transition services to TD AMERITRADE for up to six months post-closing.
  • 6Fiserv will retain a preferred share minority interest in the business being sold to Robert Beriault's entity.
  • 7The divested operations will be presented as discontinued operations starting in Q2 2007 financial results.

Frequently Asked Questions

Fiserv is selling its entire Fiserv Investment Support Services operations. While the filing doesn't explicitly state the 'why', such divestitures are often strategic, allowing companies to streamline operations, focus on core competencies, or unlock shareholder value by selling non-core assets.

The total upfront cash proceeds are $225 million from TD AMERITRADE plus $50 million from the sale to Robert Beriault's entity, totaling $275 million. Additionally, Fiserv could receive up to $100 million in contingent cash consideration from TD AMERITRADE based on future revenue performance.

The transactions are expected to close by the end of 2007, or possibly sooner, depending on the timing of customary closing conditions and required antitrust and federal and state banking regulatory approvals.

Yes, Fiserv will provide transition services to TD AMERITRADE for up to six months after closing to ensure a smooth handover. Fiserv will also retain a minority preferred share interest in the business being sold to Robert Beriault's entity.