8-KMaterial AgreementsFinancial EventsOther Events+1

FISERV INC 8-K Report, Material Agreement (Nov 13, 2007)

Filed November 13, 2007For Securities:FISV

Summary

This Form 8-K filing by Fiserv, Inc. (FISV) dated November 13, 2007, primarily details significant financial and strategic actions undertaken in contemplation of the acquisition of CheckFree Corporation. The company has amended its revolving credit facility to accommodate the acquisition, imposing new debt and EBITDA covenants. Additionally, Fiserv has entered into a $2.5 billion unsecured senior term loan facility, the proceeds of which are intended to finance the CheckFree acquisition. The company also announced its intention to sell substantially all of its health businesses, Fiserv Health, for $775 million in cash. These announcements signal a period of significant transformation for Fiserv, involving major debt financing for a substantial acquisition and the divestiture of a business segment. Investors should pay close attention to the closing conditions and potential risks associated with both the acquisition and divestiture, as outlined in the forward-looking statements, and how these transactions will impact the company's financial structure and future operations.

Key Highlights

  • 1Fiserv entered into a $2.5 billion unsecured senior term loan facility to finance the pending acquisition of CheckFree Corporation.
  • 2The company amended its existing revolving credit facility, introducing new covenants related to consolidated indebtedness (maximum 3.5-4.5x EBITDA) and interest coverage (minimum 3x EBITDA to interest expense) in anticipation of the CheckFree acquisition.
  • 3Fiserv announced an agreement to sell its health businesses (Fiserv Health) to United Healthcare Services, Inc. for $775 million in cash.
  • 4The $2.5 billion term loan facility is subject to the completion of the CheckFree acquisition and will mature five years after closing.
  • 5The term loan facility includes repayment schedules starting with $250 million in principal installments due by the end of 2008 and 2009.
  • 6The filing includes revised historical financial statements and pro forma combined financial statements reflecting the proposed dispositions and acquisition.
  • 7The company is also proceeding with the sale of its Investment Support Services segment (Fiserv ISS) in two separate transactions.

Frequently Asked Questions

This filing primarily serves to announce material definitive agreements related to Fiserv's upcoming acquisition of CheckFree Corporation. It details amendments to Fiserv's credit facilities to accommodate the acquisition and the entry into a significant new term loan. It also announces the planned sale of Fiserv's health businesses.

Fiserv is financing the CheckFree acquisition through a combination of amending its existing revolving credit facility and entering into a new $2.5 billion unsecured senior term loan facility. The term loan facility is specifically designated for this acquisition.

Fiserv has agreed to sell its health businesses, Fiserv Health, to United Healthcare Services, Inc. for $775 million in cash. This divestiture is expected to be completed by the end of 2007 or in the first quarter of 2008, subject to customary conditions and regulatory approvals.

The amended revolving credit facility requires Fiserv to limit its consolidated indebtedness to no more than a specified multiple (ranging from 3.5 to 4.5) of its consolidated EBITDA. Additionally, it must maintain consolidated EBITDA of at least three times its consolidated interest expense.