Fiserv makes deal to buy big software company

The Journal Sentinel staff

Fiserv Inc., sometimes called the Pac-Man of financial data processing companies, will gobble up a highly profitable software firm under an agreement reached Thursday.

The purchase of Information Technology Inc. is the 54th acquisition and the largest for Fiserv, a company known for its aggressive pursuit of acquisitions.

George D. Dalton, Fiserv's chairman and chief executive officer, called Information Technology "one of the most precious properties we've ever acquired."

Brookfield-based Fiserv will pay $373 million for the privately held company, which employs 229 people in Lincoln, Neb. Two-thirds of the sale price will be paid in cash, and one-third in shares of Fiserv stock. Fiserv shares closed Thursday at $26.25, up 50 cents.

Donald F. Dillon, president of ITI, as the company is known, will join Fiserv's board of directors as vice chairman. Dillon will continue to run ITI, which will be called ITI Premier Systems as part of Fiserv. Leslie M. Muma, president and chief operating officer of Fiserv, also will have the title of vice chairman.

"Everything about this is good," said Art Gillis, an independent banking consultant in New Orleans. He called the acquisition "an amazing bit of news."

Gillis said ITI, which had revenues of $110 million in 1994, is the "most profitable company in the industry" and the "most perfect example of a well-run business" he had encountered in 36 years as an analyst.

ITI designs, develops, installs and supports software that banks and savings and loans use to process their financial data. Long Considered Merger

Dalton said he and Dillon first discussed combining forces nine years ago. Dalton said he had admired Dillon and his company since then.

"The ITI name is synonymous in our industry with leadership, performance and excellence," Dalton said. He noted that Fiserv had been using ITI Premier software for some clients since 1991 and that 200 banks now chose the software at nine of Fiserv's data centers.

"We run a lot of our competitors' software," he said. "That's what the customer wants. We're in the service business."

ITI has 1,000 clients. Fiserv's comparable client base is 2,500. In 1994, ITI added 55 bank clients as licensees of Premier software, and Fiserv added 180 institutions to its data centers using the software.

Merging the two companies will allow them to "expand and enhance our core banking software systems by combining our research and development efforts," Dalton said.

Dillon said his decision to become part of Fiserv was based on his belief that the combination would better serve the clients and employees of both companies.

"The goal of ITI has always been to maintain continual growth," he said, "to build our leadership position in the industry."

Fiserv had profits of $37.7 million last year on sales of $563.6 million. The company said it expected no dilution of earnings as a result of the transaction.

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