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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: DECEMBER 20, 1999
CHECKFREE HOLDINGS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 0-26802 58-2360335
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(STATE OR OTHER (COMMISSION FILE NO.) (IRS EMPLOYER
JURISDICTION OF IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
4411 East Jones Bridge Road
Norcross, Georgia 30092
(770) 441-3387
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER
INCLUDING AREA CODE OF REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES)
Not Applicable
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS.
On December 21, 1999, CheckFree Holdings Corporation, a Delaware
corporation (the "Company"), issued a press release announcing that the Company
will acquire BlueGill Technologies, Inc., the leading provider of Internet
billing and statement creation software applications, for shares of the
Company's Common Stock.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS.
Exhibit No. Description
99 Press release, dated December 21, 1999, entitled
"CheckFree to Acquire BlueGill Technologies."
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHECKFREE HOLDINGS CORPORATION
Date: December 23, 1999 By: /s/ Allen L. Shulman
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Allen L. Shulman, Executive Vice
President, Chief Financial Officer
and General Counsel
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EXHIBIT INDEX
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Exhibit No. Description
99 Press release, dated December 21, 1999, entitled
"CheckFree to Acquire BlueGill Technologies."
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Exhibit 99
CHECKFREE TO ACQUIRE BLUEGILL TECHNOLOGIES
LEADERS IN ELECTRONIC BILLING AND PAYMENT WILL JOIN TO ACCELERATE THE
AVAILABILITY OF BILLS ON THE INTERNET
ATLANTA, Dec. 21 -- CheckFree Holdings (Nasdaq: CKFR), the leader in electronic
billing and payment, announced today that it will acquire BlueGill Technologies,
the leading provider of Internet billing and statement creation software
applications, for shares of CheckFree's Common Stock. The move strategically
extends CheckFree's market position by adding BlueGill's open standards-based
biller software products, experience in creating both business-to-consumer and
business-to-business software solutions for the Internet, Value-Added-Reseller
partnership network, and international reach to CheckFree's market-leading
electronic billing and payment infrastructure and distribution network.
Together CheckFree and BlueGill will offer to billers, banks, Internet portals
and business partners a broad solution that encompasses all of the components of
electronic billing and payment. By simplifying the process of selecting and
deploying an electronic billing and payment solution, CheckFree and BlueGill
hope to accelerate billers' abilities to get Internet-based billing content to
market quickly, which will entice consumers to sign up for the services. The
components of the electronic billing and payment process include:
-- creating an electronic bill from data stored in systems designed to
generate paper bills;
-- making electronic bills available on the Internet at the biller's Web
site, and at Web sites hosted by a variety of financial services
information and transaction providers, including financial institutions,
brokerage firms, service bureaus such as billserv.com and Internet
portals such as Yahoo! Finance and Intuit's Quicken.com enabling
consumers to view, interact with and pay the bill;
-- managing the payment process between consumers' checking accounts and
billers' accounts receivable systems; and
-- providing event tracking and customer service and support for each of
these steps.
Jim Dixon, group executive, operations and technology, for Bank of America
Corporation, said combining the components of electronic billing and payment is
a positive move. "The combination of CheckFree and BlueGill clarifies that there
are component parts to achieving the presentment and payment of bills
electronically," Dixon said. "This clarity is beneficial to the marketplace. The
combination of these two companies provides direction as to where billers can go
for solutions, which should accelerate getting electronic billing content to
market. This will, in turn, heighten consumer interest in the service through
financial institutions such as Bank of America," Dixon concluded.
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Advancement in Interoperability
CheckFree president and chief operating officer Pete Sinisgalli said that
CheckFree chose to acquire BlueGill Technologies after an extensive evaluation
of biller software server providers that included detailed reviews of both
existing technology and market vision. He said that among the reasons CheckFree
chose BlueGill Technologies were an infrastructure that has proven scalability,
and a technology vision that supports interoperability.
"BlueGill introduced the first software system developed using Extensible Markup
Language, or XML, and has been perfecting it for more than two years,"
Sinisgalli said. "That is important, because XML is generally acknowledged to be
the standard for describing data exchanged over the Internet. XML enables
businesses to share information broadly and efficiently, and will accelerate the
adoption of data exchange over the Internet, much as Hypertext Markup Language,
or HTML, advanced the adoption of data presentation over the Internet. Data
exchange over the Internet in an interoperable fashion is at the heart of the
promise of electronic billing and payment," Sinisgalli said.
Avivah Litan, Interactive Financial Services research director at industry
analyst firm GartnerGroup, agrees that BlueGill's technology is an advantage.
"Our just-completed market research of more than 170 leading U.S. billers found
that 'ease of interfacing with legacy billing and accounts receivable systems'
stands out as the single most important criterion businesses use when choosing
an e-billing company," Litan said. "BlueGill's expertise in XML and experience
managing e-billing functions directly or through programming interfaces meet
this need." Sinisgalli said CheckFree plans to utilize BlueGill's experience
working with other software and service providers. "BlueGill's solid
partnerships with a variety of software and service providers, including IBM,
Xerox, EDS, M&I Data, Moore Business Communications Services and Broadvision.
This brings tremendous value to CheckFree, and can help us create together
electronic bills and statements that can be leveraged in Internet-based customer
relationship management, marketing and service applications for both the
business-to-consumer and business-to-business markets," Sinisgalli said.
Sinisgalli also noted that BlueGill's existing technology relationships with
TransPoint, M&I Data Systems, financial institutions such as Chase Manhattan,
CitiBank, and BankOne and 16 biller service bureaus can be leveraged to help
advance interoperability among vendors, consumer service providers and biller
service providers in the electronic billing and payment market.
"Although BlueGill's i-Series software will connect to CheckFree's
industry-leading Genesis 2000 electronic billing and payment processing
platform, it also will continue to connect, as it does today, to all
commercially reasonable distribution points," Sinisgalli said. "Likewise,
CheckFree will continue to work with other open standards-based biller server
software providers who want to utilize Genesis 2000," he said.
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Raising the Bar for Leading Electronic Billing and Payment
Pete Kight, CheckFree's chairman and CEO, said that CheckFree and BlueGill share
a common culture for continuing to advance the requirements for market
leadership in electronic billing and payment.
"CheckFree and BlueGill each have a history of building products and services
with a vision that demands scalability and reliability, with a quality consumer
experience always first in mind," said Kight. "Beyond the core application of
electronic billing and payment, we also share a vision of electronic bills as
interactive communication tools. Each month, businesses interact with their
customers through a vitally important conduit, the bill. How that interaction
can be channeled into other marketing, sales and customer service applications
over the Internet is one of the most enticing promises of this technology."
"To realize that promise, we first must speed adoption of the core electronic
billing and payment application," Kight continued. "We believe joining our
technology and services with BlueGill's will help us, together, help billers
bring electronic bills to the Internet at the pace consumers want. The question
of whether or not consumers want this service has been answered. They do. Now
the question is 'how fast can they get it?' The driving force behind our union
with BlueGill is to make the answer, 'Fast.' We're very proud to be associated
with Hal Davis and his team, and look forward to exciting times ahead."
Hal Davis, BlueGill's president and CEO, concurred. "A common vision is
important in the union of any two companies," Davis said. "CheckFree and
BlueGill already share a history of working together to deliver electronic
billing and payment solutions for 15 customers, including MCI Worldcom, Chase,
GTE Wireless and SallieMae. Through those experiences, we have learned a great
deal about each other's missions and values. CheckFree's market visibility and
leadership strengthens BlueGill's brand, and our business-to-business expertise,
strategic partnership network and international foothold gives CheckFree
exciting avenues in which to expand its business. We look forward to working
together to dramatically increase the impact Internet billing and payment has on
the way companies and their customers interact in the next century," Davis
concluded.
In terms of market expansion, BlueGill's experience with customers in South
America and Europe, including Barclay's Bank and Cable & Wireless, and its
software development operations in Toronto, Canada, give CheckFree a stronger
foothold in expanding its services internationally. CheckFree already has some
international experience through its electronic billing and payment relationship
with New Zealand Post.
Terms of the Transaction
CheckFree will exchange approximately 3.2 million shares of CheckFree Common
Stock for all outstanding BlueGill Capital Stock, based on a valuation of $250
million. The transaction will be accounted for as a purchase, and is expected to
be final in early calendar 2000. According to
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Sinisgalli, BlueGill's management team, base of about 100 employees, and
locations in Ann Arbor, Michigan and Toronto, Canada, will remain with the
Company. The unit's financial results will be reported within CheckFree's
software business segment.
"For the remainder of CheckFree's fiscal year, which ends June 30, we expect
BlueGill to contribute about $5 million of incremental revenue, and to dilute
earnings per share by about 10 cents per share before amortization charges,"
Sinisgalli noted. "Over the next 30 to 60 days, BlueGill and CheckFree will work
together to develop joint product development, sales and operational plans that
ensure our customers, partners and prospects gain the full benefits of our
having joined our technologies and services."
About CheckFree
CheckFree Corporation (www.checkfree.com), is the leading provider of financial
electronic commerce services and products. Founded as an electronic payments
processor in 1981, CheckFree launched the first fully integrated electronic
billing and payment solution, CheckFree E-Bill, in March of 1997. Today,
CheckFree services enable three million consumers to receive and pay bills over
the Internet or electronically. The Company has multi-year contracts with 77 of
the nation's top billers to provide online billing and payment through its
network of partnerships with consumer service providers (CSPs), including banks,
brokerage firms, Internet portals and content sites, and personal financial
management (PFM) software. CheckFree's Investment Services division provides a
range of investment management services to help more than 255 institutions
provide portfolio management and reporting services to their clients. CheckFree
clients manage over 760,000 portfolios totaling more than $400 billion in
assets. Software and services provided by CheckFree's Software division are used
to process more than two-thirds of the nation's six billion Automated Clearing
House (ACH) payments. In addition, nearly 400 banks and businesses use
reconciliation products and services the division provides.
About BlueGill Technologies
Founded in 1996, BlueGill Technologies pioneered Internet bill and statement
presentment, and today is an international software development company.
BlueGill software provides a powerful platform for electronic billing and
payment by transforming legacy systems into interactive Web applications for
managing customer relationships. BlueGill software is installed at financial
service institutions, telecommunications companies, utilities, and service
bureaus in North America, South America and Europe. The Company's roster of
clients and partners includes companies such as CitiBank, Chase Manhattan Bank,
U.S. Bank, ABN AMRO, EDS, Cable & Wireless, Guardian Insurance, Capital One,
Detroit Edison, Billserv.com, IBM and Xerox. More information on the Company is
available on the Internet at www.bluegill.com .
This press release contains statements that are not purely historical, and as
such are forward-looking statements under the Federal Securities laws. These
include forward-looking statements regarding management's intentions, plans,
hopes, beliefs, expectations or projections of the future, and include
statements in this document regarding: the advancement in interoperability
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(paragraphs 4-9); the increase in pace to bring electronic bills to the Internet
(paragraph 12); the ability of the Company to expand into new international
markets (paragraph 14); the closing of the acquisition of BlueGill (paragraph
15); and the financial impact of the acquisition of BlueGill on the Company
(paragraph 16). These forward looking statements involve risks and
uncertainties, including without limitation, whether the planned technology
developments will be successful and accepted by the Company's customers; whether
the Company can deliver its services at the pace demanded by the marketplace;
whether the Company can successfully and profitably expand and operate
internationally; whether the conditions to the merger, including stockholder,
regulatory and other approvals, can be satisfied or obtained to permit the
closing of the acquisition; whether BlueGill can be successfully integrated with
the Company's operations; whether consumers will sign up for and use the
Company's services when and as expected; whether the Company's customers,
particularly financial institutions and Internet portals, timely announce,
actively offer and aggressively market such services to their clients and users;
whether the Company's business and market assumptions supporting its current
revenue and earnings projections will prove to be accurate; and other risks and
uncertainties detailed from time to time in the Company's periodic reports filed
with the Securities and Exchange Commission. These SEC filings include Form 10-K
for the year ended June 30, 1999 and Form 10-Q for the quarter ended September
30, 1999. One or more of these factors have affected, and could in the future
affect, the Company's business and financial results in future periods, and
could cause actual results to differ materially from plans and projections.
There can be no assurance that the forward-looking statements made in this press
release will prove to be accurate, and issuance of such forward-looking
statements should not be regarded as a representation by the Company, or any
other person, that the objectives and plans of the Company will be achieved. All
forward-looking statements made in this press release are based on information
presently available to management, and the Company assumes no obligation to
update any forward-looking statements.
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