Jack Henry announces plans to acquire BancTec

Jack Henry & Associates, Inc. and BancTec Inc. announced July 12 that they have signed a non-binding expression of interest for the purchase of BancTec's community banking and data center operations.

The letter of agreement contemplates that Jack Henry and BancTec will enter into a definitive purchase agreement for Jack Henry to acquire BancTec's Financial Systems business unit for approximately $50 million in cash and the assumption of certain liabilities.

"The acquisition of BancTec's community bank operations, including its customer base, account processing capabilities and data center operations, represents a significant opportunity to expand our business and is expected to begin contributing to earnings within a year," said Michael E. Henry, chairman and chief executive officer of Jack Henry & Associates.

"We are excited about the opportunity to expand into the UNIX world and look forward to delivering high quality service and support to BancTec's well-established customer base."

BancTec's community banking products operate primarily on a UNIX platform, while Jack Henry's core products and services operate primarily on the IBM A/S 400 platform. For calendar 1998, revenues from the BancTec community banking operations totaled approximately $43 million, or 7 percent of bancTec's revenues and 24 percent of Jack Henry's revenues.

Jack Henry reported July 21 its 38th consecutive quarterly earnings increase with income from continuing operations of $8.4 million or 40 cents per share. For the fiscal year that ended June 30, new records were set with revenue increasing 30 percent to $184.5 million and income from continuing operations increasing 36 percent to $32.5 million or $1.54 per share.

"In a market where financial services technology providers are struggling to overcome the challenges posed by the approaching millennium, our people have been able to generate very strong growth by providing high quality service and add-on products for both existing and new clients," Henry said.

"Our service bureau operations coupled with strong sales for our Internet banking products, teller, payroll and check image systems more than offset the industry-wide slowdown in core system sales."