Netzee, a provider of integrated Internet banking and bill payment products and services, has entered into an agreement to sell substantially all of its assets for $10.4 million in cash to Certegy (NYSE: CEY).
The assets include Netzee’s Internet and telephone based products serving over 800 financial institutions to Certegy, which is based in Alpharetta, GA
The deal was announced Monday.
Certegy is a provider of card services to over 6,000 financial institutions. It offers an integrated suite of electronic banking services to community banks, including Internet banking, electronic bill payment, corporate cash management and telephone banking.
“We are extremely pleased to know that our customers will continue to receive quality services and products from an organization recognized as an industry leader in the community financial institution market,” Donny R. Jackson, president and chief executive officer of Netzee, said in a statement.
InterCept (Nasdaq: ICPT), a provider of technology products and services for financial institutions, owns 28 percent of Netzee’s common stock. Along with John Harland and Co., InterCept had provided it with a line of credit.
It is anticipated that holders of Netzee common stock will receive approximately 50 cents per share in the liquidation. Consummation of the sale transaction is subject to a variety of conditions, including shareholder approval. The parties hope to close by mid-January.
InterCept expects to receive approximately $500,000 for its shares of Netzee common stock, and as much as $3 million as payment on its note receivable. InterCept anticipates that it will record a one-time charge of up to $6.5 million in the fourth quarter of 2002.
“We believe this transaction will favorably address a number of issues for both Netzee’s customers and our shareholders,” said InterCept CEO John Collins. “Certegy’s strong reputation and excellent financial resources should assure Netzee’s customers that they will continue to receive the quality service to which they are accustomed, without the worry of financial concerns.”
Additionally, Collins said this transaction will eliminate the uncertainty of Netzee’s viability and will result in InterCept’s receipt of as much as $3.5 million in cash. Equally as important, he said, InterCept would no longer be required to record its portion of Netzee’s losses from operations in, simplifying its financial reporting.