Atlanta-based CheckFree said the BlueGill buy will extend its services to international markets and incorporate BlueGill's existing software, which provides an electronic billing and payment system to its own set of online bill-payment services. BlueGill said it has a growing customer base in South America and Europe, including Barclay's Bank and Cable & Wireless.
Under the deal, CheckFree and BlueGill said they plan to offer billers, banks, Internet portals and businesses a broad product suite that includes tools for making electronic bills available on billers' Web sites and financial services' sites. The suite will also provide customer service and support for online billing services, and manage the payment process between consumers and billers.
CheckFree said it will exchange approximately 3.2 million shares of its common stock for all outstanding BlueGill Capital stock based on a valuation of $250 million.
CheckFree said BlueGill's management team and 100 employees, along with its locations in Ann Arbor, Mich., and Toronto, Canada, will remain with BlueGill. The new unit's financial results will be reported within CheckFree's software business segment, the companies said in a statement.
For the remainder of CheckFree's fiscal year, which ends June 30, 2000, the company said it expects BlueGill to contribute about $5 million of incremental revenue and to dilute earnings per share by about 10 cents per share before charges.
Last week, CheckFree and Yahoo launched a new service that allows customers to receive bills over the Internet, which marked the latest effort by a major company to encourage widespread adoption of online bill-paying services. Yahoo and CheckFree introduced an extension of Yahoo E-bills that will allow customers to not only pay their bills online but also to easily access and view their bills. Earlier this year, Yahoo and CheckFree unveiled an online bill-payment service.
The BlueGill transaction will be accounted for as a purchase, and is expected to be final in early 2000, the companies said. BlueGill has customers including Citigroup's CitiBank, IBM and Billserve.com.