Business Context and Reporting Period
This Form 8-K Current Report, dated March 31, 2009, details two material definitive agreements entered into by Fidelity National Information Services, Inc. (FIS). The filing announces a proposed merger with Metavante Technologies, Inc. and a concurrent private placement of equity securities to raise capital.
Key Financial Metrics and Transaction Terms
- Merger Consideration: Metavante shareholders will receive 1.35 shares of FIS common stock for each outstanding share of Metavante common stock.
- Capital Raise: FIS agreed to issue approximately 16.08 million shares of common stock in a private placement.
- Investment Amounts:
- Thomas H. Lee Partners, L.P. (THL): Approximately $200 million for 12,861,736 shares.
- Fidelity National Financial, Inc. (FNF): Approximately $50 million for 3,215,434 shares.
- Transaction Fees: FIS will pay THL and FNF a transaction fee equal to 3% of their respective investments.
- Termination Fee: A fee of $175 million is payable by either party under specified termination circumstances, including entering into a superior proposal.
Material Changes and Governance
Upon consummation of the merger, the FIS Board of Directors will be reconstituted to nine members. Key leadership changes include:
- William P. Foley, II: Continues as Chairman of the Board.
- Lee A. Kennedy: Becomes Executive Vice Chairman.
- Frank R. Martire: Becomes President and Chief Executive Officer.
- THL Representation: Contingent on maintaining ownership levels, THL will have the right to designate one member to the Board of Directors.
Guidance, Risks, and Conditions
The transactions are subject to customary closing conditions, including:
- Shareholder approval from both FIS and Metavante.
- Receipt of required governmental approvals and expiration of waiting periods.
- Accuracy of representations and warranties (subject to material adverse effect standards).
- Delivery of legal and tax opinions.
Termination Rights: The Merger Agreement may be terminated if the merger is not completed by December 31, 2009. The Investment Agreement is also contingent upon the consummation of the Merger.
Lock-up Period: THL and FNF are restricted from transferring the shares purchased for 180 days following the closing of the investments.
Investor Verification Checklist
- Verify the final approval status of the merger and investment by FIS and Metavante shareholders.
- Confirm receipt of all necessary governmental and regulatory approvals.
- Review the upcoming Form S-4 registration statement and joint proxy statement/prospectus for detailed risk factors and financial data.
- Monitor the status of the $175 million termination fee conditions and any potential superior proposals.
- Assess the impact of the 1.35 exchange ratio and the new equity issuance on existing shareholder dilution.