Fiserv to Sell Majority Interest in Insurance Biz

Fiserv Inc., a provider of information technology services to the financial and insurance industries, has signed a definitive agreement with Trident IV, a private equity fund managed by Stone Point Capital LLC, in which Trident will invest approximately $205 million in equity and $335 million in debt to acquire a 51 percent majority interest in Fiserv’s insurance businesses.

Fiserv expects to receive approximately $510 million in net after-tax proceeds and to retain a 49 percent equity interest in Fiserv Insurance Solutions. The transaction is anticipated to close in July 2008, subject to regulatory approval and other customary closing conditions. The transaction will include nearly all aspects of Fiserv’s insurance segment. The current management team and employee base will continue with the company, which will be known as Fiserv Insurance Solutions Inc.

Stone Point Capital and its predecessor operations have a 20-year history of investing in the global insurance and financial services industries. Stone Point Capital primarily targets investments in the insurance and financial services industries, including insurance underwriting, distribution and services, benefits and healthcare, asset management and retirement savings, and banking and depository institutions.

Fiserv expects to receive approximately $510 million of net transaction proceeds and expects slight 2008 earnings dilution of less than 1 percent, or $0.02 to $0.03 per share depending upon reinvestment of the net proceeds. In connection with the sale, Fiserv also affirmed its 2008 adjusted earnings per share guidance range of $3.28 to $3.40 from continuing operations. Fiserv expects the transaction to be accretive to its long-term revenue, earnings and margin growth rates.

Upon closing the transaction, Fiserv will no longer consolidate revenue and expenses from Fiserv Insurance Solutions. Due to the sale of its majority interest, the company will report its 49 percent share of net earnings in Fiserv Insurance Solutions on a single income statement line item, which is anticipated to begin in Fiserv’s third quarter earnings announcement.