Metavante Buys the Software Company Behind SVPCo.’s Network

Metavante Corp. continues to pursue an aggressive acquisition strategy in electronic payments with it announcement today that it agreed to buy VECTORsgi, a software company in Addison, Texas, that sells check-imaging software. The acquisition, valued at $100 million in cash plus another $35 million to be paid if certain targets are reached, is expected to close next month. It hands Milwaukee-based Metavante, which this summer bought Advanced Financial Solutions Inc. as well as a related image-exchange system called Endpoint Exchange, the technology behind an image exchange operated by the New York-based Small Value Payments Co. Both Endpoint Exchange and SVPCo.'s network have national aspirations, though SVPCo.'s system, which only went live in August, is expected to channel larger image volumes because it serves many of the nation's largest banks. The deal also strengthens Metavante's hand in anticipation of the effective date, 13 days from now, of the Check Clearing for the 21st Century (Check 21) Act, which encourages banks to create and trade electronic files rather than paper checks. Oklahoma City-based AFS is a major player in imaging software for financial institutions, with a focus on fraud detection, and its founders were also behind the creation of Endpoint Exchange, which was the first network with national aspirations to begin trading check images. The deal brings means Metavante, a unit of Milwaukee's Marshall & Ilsley Corp, has laid out approximately $1.3 million this year to bolster its strategic position in electronic payments, from check imaging through electronic funds transfer. Besides the AFS/Endpoint Exchange deal, the company this summer also acquired the NYCE EFT network, Montvale, N.J., and earlier in the year bought Kirchman Corp., a provider of core banking software. VECTORsgi, which had been part of a portfolio of companies held by Thoma Cressey Equity Partners, will become a wholly owned subsidiary of Metavante. Current management is expected to remain in place.