Fiserv, Inc. (FISV) recently priced a public offering of $1.0 billion aggregate principal amount of senior notes. The notes were offered in two categories: $600 million of senior notes that mature in 2016 and bear interest at a rate of 3.125%, and $400 million of senior notes that mature in 2021 and bear interest at a rate of 4.750%.
Fiserv expects to close the offering at June 14, 2011. Fiserv intends to use the net proceeds of the offering to fund a tender offer for any and all of its $1.0 billion aggregate principal amount of 6.125% senior notes due 2012 and to use any remaining net proceeds for general corporate purposes.
Fiserv expects to incur a loss on debt extinguishment of approximately $53 million after tax.
In May, Fiserv announced that its board of directors has authorized the company to repurchase up to 7.5 million shares of the company’s common stock or approximately 5% of its outstanding shares.
Fiserv assists financial institutions and health plan administrators in managing their information systems, which help them deliver services efficiently to their customers. The company competes with Fidelity National Information Services Inc. (FIS) Metavante Technologies Inc., Jack Henry and Associates Inc., and Open Solutions Inc.
Fiserv repurchased $413 million of common stock in 2010. On November 16, 2010, the board of directors authorized the purchase of up to 7.0 million additional shares of common stock. As of December 31, 2010, Fiserv had 6.0 million shares remaining under this authorization.
In April, Fiserv reported adjusted income from continuing operations of $151 million (excluding items) or $1.02 per share in the first quarter of 2011, which was up 7% year over year. However, the reported figure missed the Zacks Consensus Estimate of $1.04.
Going forward, the company will focus on growth, especially high-quality revenue growth and innovative products.
For 2011, management expects its adjusted internal revenue growth expectation in the range of 2–4%, on the back of the Payments segment. Management stated that the company’s investments in new technology solutions, such as ZashPay and Mobile Money, will fuel organic revenue later this year.
FIDELITY NAT IN (FIS): Free Stock Analysis Report
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