For additional information contact:
Michelle Kersch, Sr. VP, Marketing and Corporate Communications, Marketing Communications
Phone: 904-854-5043, Email: michelle.kersch@fnis.com
Mary Waggoner, Sr. VP, Investor Relations, Fidelity National Information Services
Phone: 904.854.3282, Email: mary.waggoner@fnis.com
Jacksonville, Fla. – Fidelity National Information Services, Inc. (NYSE:FIS), a leading global provider of technology services to financial institutions, today announced that its Board of Directors has approved pursuing a plan to spin-off its Lender Processing Services (“LPS”) division into a separate publicly traded company.
As currently contemplated, the Company will contribute the assets of LPS into a newly formed subsidiary (“Newco”) in exchange for 100% of Newco common stock and approximately $1.6 billion of Newco debt securities. Following receipt of necessary Securities and Exchange Commission (“SEC”) approvals and a tax-free ruling from the Internal Revenue Service (“IRS”), FIS will distribute 100% of Newco common stock to FIS shareholders in a tax-free spin off. Immediately following the spin-off, FIS will exchange the Newco debt securities it owns for a like amount of existing FIS debt through a debt-for-debt exchange that is tax-free to FIS. FIS would then retire the FIS debt that is exchanged for the Newco debt securities. Completion of the possible spin-off is expected to occur in mid-2008. Management and directors of FIS and Newco have not yet been determined.
FIS’ Transaction Processing Services business is a leading global provider of core processing, e-payments, item processing and card processing solutions to financial institutions. On a pro forma basis, including the recently acquired eFunds, Transaction Processing Services generated revenue of $3.3 billion over the last 12 months. FIS’ Lender Processing Services business is the nation’s leading provider of integrated data, servicing and technology solutions to large-scale mortgage lenders. LPS’ end-to-end mortgage services include origination, automated title and settlement, processing, default, valuation, risk management, tax, flood and collateral protection solutions. More than 50 percent of mortgage loans in the U.S. are processed using LPS’ industry leading Mortgage Servicing Package. Lender Processing Services generated $1.7 billion in revenue over the last 12 months.
“Transaction Processing Services and Lender Processing Services each have strong competitive positions, robust organic growth track records and excellent potential for future growth. However, they are distinct and unique businesses that serve different customers, operate in different markets, and attract different investors,” stated William P. Foley, II, executive chairman of FIS. “We believe the proposed separation will provide more company flexibility and dedicated management focus with respect to product development, capital investment and strategic initiatives, which should ultimately drive higher value to our customers and shareholders.”
FIS expects to file a ruling request with the IRS regarding the tax-free nature of the LPS spin-off within approximately 60 days and a preliminary Form 10 Registration Statement with the SEC in the first quarter of 2008. Completion of the spin-off is contingent upon the satisfaction or waiver of a variety of conditions, including final FIS Board of Directors approval.
Conference Call
FIS will host a conference call with investors and analysts to discuss the proposed transaction, together with FIS’ third quarter operating results, on Thursday, October 25, 2007, beginning at 8:30 a.m. Eastern time. Those wishing to participate via the webcast should access the call through FIS’ Investor Relations Web site at http://www.fidelityinfoservices.com. Those wishing to participate via the telephone may do so by calling 800-762-6568 (USA) or 480-248-5088 (International). The webcast replay will be available on FIS’ Investor Relations website. The telephone replay will be available through November 10, 2007, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 890767.
About Fidelity National Information Services
Fidelity National Information Services, Inc. (NYSE:FIS) is a leading provider of core processing for financial institutions; card issuer and transaction processing services; mortgage loan processing and mortgage-related information products; and outsourcing services to financial institutions, retailers, mortgage lenders and real estate professionals. FIS has processing and technology relationships with 35 of the top 50 global banks, including nine of the top 10. Approximately 50 percent of all U.S. residential mortgages are processed using FIS software. FIS is a member of Standard and Poor’s (S&P) 500® Index and has been ranked the number one banking service provider in the world by American Banker and the research firm Financial Insights and the number two overall financial technology provider in the annual FinTech 100 rankings. Headquartered in Jacksonville, Fla., FIS maintains a strong global presence, serving more than 10,000 financial institutions in more than 80 countries worldwide. For more information on Fidelity National Information Services, please visit www.fidelityinfoservices.com.
Forward-Looking Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties and may not occur. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future events and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to risks associated with the ability of FIS to contribute LPS assets and liabilities to Newco; the ability of LPS to obtain debt on acceptable terms and exchange that debt with certain holders of the FIS debt; obtaining government approvals; obtaining FIS Board of Directors approval; market conditions for the spin-off; the risk that the spin-off will not be beneficial once accomplished, including as a result of unexpected dis-synergies resulting from the separation or unfavorable reaction from customers, rating agencies or other constituencies; changes in general economic, business and political conditions, including changes in the financial markets; the effects of our substantial leverage (both at FIS prior to the spin-off and at the separate companies after the spin-off); the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in the banking, retail and financial services industries; failures to adapt our services to changes in technology or in the marketplace; adverse changes in the level of real estate activity, which would adversely affect certain of our businesses; our potential inability to find suitable acquisition candidates or difficulties in integrating acquisitions; significant competition that our operating subsidiaries face; the risks and uncertainties related to our recently announced data theft, which continues to be investigated, and which includes the potential for fines, increased operating costs and loss of business; and other risks detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of the Company’s Form 10-K and other filings with the Securities and Exchange Commission.