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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: FEBRUARY 15, 2000
CHECKFREE HOLDINGS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 0-26802 58-2360335
- ------------------------------- --------------------- ----------------------
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NO.) (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
4411 East Jones Bridge Road
Norcross, Georgia 30092
(678) 375-3387
(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 February 15, 2000, CheckFree Holdings Corporation, a Delaware
corporation ("CheckFree"), announced that it had entered into a definitive
merger agreement with Transpoint LLC, an entity owned by Microsoft, First Data
and Citibank.
CheckFree's press release issued February 15, 2000 regarding the merger
is attached as an exhibit to this report and is incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
99 Press release of CheckFree Holdings Corporation
issued February 15, 2000, regarding the merger.
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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 CORPORATION
Dated: February 16, 2000 By: /s/ Allen L. Shulman
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Allen L. Shulman, Senior Vice
President, Chief Financial Officer
and General Counsel
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EXHIBIT INDEX
Exhibit No. Description
99 Press release of CheckFree Holdings Corporation
issued February 15, 2000, regarding the merger.
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Exhibit 99
[CHECKFREE LOGO] [MICROSOFT LOGO] [FIRST DATA LOGO]
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<TABLE>
<S> <C> <C>
CheckFree Media Relations: Microsoft Media Relations: First Data Corp.Media Relations:
- -------------------------- -------------------------- --------------------------------
Judy Morris Barb Hemberger, Shandwick Caroline Hoke
(678) 375-1595 (425) 703-6625 (770) 857-7178
[email protected] [email protected] [email protected]
CheckFree Investor Relations: Microsoft Investor Relations: First Data Corp. Investor Relations:
- ----------------------------- ----------------------------- ------------------------------------
Tina Moore Carla Lewis Barbara Marxer
(678) 375-1278 (425) 936-3703 (770) 857-7118
[email protected] [email protected] [email protected]
</TABLE>
CHECKFREE, FIRST DATA AND MICROSOFT JOIN FORCES TO
ACCELERATE ELECTRONIC BILLING AND PAYMENT USE
-- CHECKFREE AND TRANSPOINT TO MERGE IN 17-MILLION SHARE TRANSACTION --
ATLANTA and REDMOND, Wa. (February 15, 2000) - CheckFree (Nasdaq: CKFR),
the market leader in electronic billing and payment, and TransPoint, the
electronic billing and payment joint venture between First Data Corp. (NYSE:
FDC) and Microsoft Corp. (Nasdaq: MSFT), announced today they have entered into
a definitive merger agreement. All outstanding ownership interests in
TransPoint, which are held by Microsoft, First Data and Citibank, will be
transferred to CheckFree, and certain joint marketing agreements will be
established, in exchange for 17 million shares of CheckFree's Common Stock.
Based on the closing price of CheckFree stock on Tuesday, February 15, the
transaction is valued at approximately $1 billion. When the transaction closes,
Microsoft, First Data and Citibank together will own 23 percent of CheckFree.
CheckFree and TransPoint will join their technologies and resources to
accelerate moving the billing and payment process from paper to the Internet.
They also plan to advance the rate at which consumers sign up for electronic
billing and payment by working together to make the service more familiar, easy
to use, safe, reliable and available wherever consumers want it to be.
"By combining CheckFree's electronic billing and payment expertise, First
Data's broad electronic payment and reconciliation leadership, and Microsoft's
software application and Internet expertise, we are aligning the components
necessary to accelerate the move to the Internet to receive and pay bills," said
Pete Kight, chairman and CEO of CheckFree. "Our goal is to expand the overall
market so that it approaches 30 percent of U.S. households receiving and paying
bills online by 2003."
"By combining forces on a common model, TransPoint and CheckFree will
stimulate the growth of this entire industry and provide a clearer and more
compelling offer to companies and to consumers," said Lewis Levin, president and
CEO of TransPoint, and vice president of Microsoft. "Microsoft will then
concentrate its considerable efforts on creating unique web
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capabilities for consumers on MSN(TM) and MoneyCentral(TM) using CheckFree, and
on integrating payment and billing capabilities in our new Next Generation
Windows(R) Services platform."
Ric Duques, chairman and CEO of First Data Corp., said that in addition to
igniting the marketplace through expanded consumer choice of how they receive
and pay their bills, the agreement also provides an exceptional opportunity to
capitalize on First Data's core payment processing expertise.
"First Data's objective is to process electronic payments from start to
finish. This partnership will make it easier for consumers, banks and billers to
use electronic billing and payment, and to accept it as the preferred way to do
business. First Data is a natural beneficiary of this expanded consumer
acceptance - more users equates to more payments for First Data to process,"
said Duques. "In addition, a recently signed agreement between Western Union and
TransPoint will be transferred to CheckFree, potentially doubling the number of
electronic connections CheckFree and TransPoint currently have in place.
Ultimately, the strengths all parties bring will take us faster and farther than
any of us could go alone."
ACCELERATING MARKET DEVELOPMENT
To drive consumer adoption, Microsoft, First Data and CheckFree plan to
advance interoperability among electronic billing and payment solutions, as well
as among other financial electronic commerce applications deployed on the
Internet. The companies will work closely to develop open technology standards
and simplify the overall market model so that:
o Consumers have more options and can receive their bills wherever they
choose on the Internet;
o Billers gain the broadest distribution possible without using multiple
systems;
o Consumer Service Providers such as banks, brokerages and portals can
deliver bills from the combined biller bases of TransPoint and CheckFree
without having to implement duplicate systems; and
o Microsoft will become a major online consumer retail provider for
CheckFree's electronic billing and payment services via MSN MoneyCentral
and other non-disclosed online payment services.
Financial institutions that operate as Consumer Service Providers will
benefit from increased billing content and improved quality and performance.
They will gain a broader base of bills to distribute to their retail customers
without implementing multiple systems. And, by leveraging First Data's extensive
payment capabilities, they will experience increased quality and service
performance. Financial institutions that operate as Biller Service Providers
will benefit from being able to offer a complete end-to-end solution under their
brand to corporate customers, backed by CheckFree, Microsoft and First Data.
Nearly 80 billers already make electronic bills available on the Internet
through either CheckFree or TransPoint. These include AT&T, MCI Worldcom, GTE
and Qwest Communications.
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COOPERATING ON TECHNOLOGY
When the transaction is finalized, CheckFree, Microsoft and First Data will
collaborate on the development of new products and services, and use each
other's technologies. Some of these agreements are as follows:
o The companies have agreed to work together to develop electronic invoicing
and payment for Microsoft's business-to-business initiatives, as well as
for future financial electronic commerce services, including the
integration of First Data's payment solutions. CheckFree will provide
electronic billing and payment technology used in applications and services
Microsoft and First Data develop.
o CheckFree and BlueGill Technologies (acquisition pending) will utilize
Microsoft technology to develop and deploy electronic billing and payment
solutions, and CheckFree will capitalize on First Data's broad range of
electronic payment technologies, including processing, settlement and
electronic remittance capabilities.
o BlueGill Technologies, which is already a TransPoint software partner, will
provide immediate interoperability between CheckFree and TransPoint
electronic billing and payment systems. CheckFree, Microsoft and First Data
will bring interoperability to a new plane, by helping electronic billing
and payment to become an interactive channel that integrates with other
web-based applications.
o CheckFree will use Microsoft Windows NT(R) operating system and SQL
Server(TM) database software in its development of electronic billing and
payment solutions for billers, as well as Microsoft Windows NT and the
Microsoft BackOffice(R) family in its data center. CheckFree also will
support Next Generation Windows Services from Microsoft.
o CheckFree will use First Data's broad array of electronic payment
and reconciliation services. Western Union's domestic network of more than
4,000 billers, from electric and gas to water and phone companies, will
help accelerate consumer adoption, increasing the number of e-commerce
processing opportunities.
SIMPLIFYING ELECTRONIC BILLING AND PAYMENT FOR BILLERS
Billers that want to ensure the broadest distribution possible for their
bills now will have a streamlined path toward achieving that goal. CheckFree
will continue to support billers using TransPoint's Biller Integration Server
(BIS) software and electronic billing and payment services for three years,
supported through First Data's Denver-based data center.
"We applaud CheckFree, First Data and Microsoft working together to
simplify managing electronic billing and payment systems for billers," said
Wayne Irwin, assistant vice president of Web Commerce for GTE. "Now billers can
focus on marketing efforts to drive adoption, confident that their consumers
will enjoy the experience of receiving and paying bills on the Internet."
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"Online banking adoption at BankOne has never been better," said Michael W.
Johnson, president of Interactive Delivery for BankOne Retail. "This agreement
has the potential to dramatically escalate the number of bills consumers can
receive and pay at their trusted financial institution's Web site. Our research
shows that the consolidation of billing and payment systems will drive the rate
of customer adoption higher. Consolidation of the industry is a great benefit to
our customers."
"The combination of CheckFree and TransPoint is a `win' for all
financial institutions who offer electronic billing and payment, because it will
enable the delivery of more bills over the Internet, faster, and more
efficiently," said Patrick J. Swanick, president and CEO, Key Electronic
Services. "In addition, this union will simplify customer service by allowing us
to track billing and payment across a single infrastructure. The ability to
deliver more bills will heighten interest in electronic billing and payment, get
consumers talking about it, and should result in greater convenience and higher
consumer adoption," he said.
Intuit Inc., which is a TransPoint partner and has a minority ownership
position in CheckFree, voiced support for combining the companies, citing
interoperability as a key benefit.
"Intuit believes the combination of CheckFree and TransPoint is a very
positive move for the acceleration of electronic billing and payment," said Bill
Campbell, chairman of Intuit. "Through our relationship with CheckFree,
Quicken.com and its customers will be strong beneficiaries of the increase in
electronic bills delivered," Campbell said.
INTERNATIONAL REACH
"Working more closely with Microsoft and First Data, both technology
leaders worldwide, should facilitate CheckFree's ability to expand
internationally," said Kight. "There may be opportunities to utilize First
Data's Western Union agent network of more than 82,000 locations, reaching 176
countries. First Data also has key agent relationships with 28 post offices,
including German Post Bank and French La Poste, for example, that could further
extend CheckFree's international reach," he added.
TransPoint is currently helping to develop an electronic billing and
payment service in Australia, and also has a relationship with BCE Emergis,
which is providing bill presentment processing for a consortium of Canada's
largest financial institutions. CheckFree has deployed electronic billing and
payment solutions in New Zealand, and will have sales and service offices in
Canada, Singapore, and the United Kingdom, through BlueGill Technologies.
Microsoft is the worldwide leader in software for personal and business
computing. Microsoft has subsidiaries operating in 60 nations around the globe,
and has created and developed products in more than 30 languages.
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TERMS OF THE TRANSACTION
The transaction will be accounted for as a purchase by CheckFree, and
is expected to be final in four to six months, subject to approval by CheckFree
stockholders and customary filings and regulatory approvals. The transaction is
not expected to impact financial results for CheckFree's current fiscal year
ending June 30, 2000.
As part of the transaction, CheckFree will receive an exclusive five-year
relationship with Microsoft to provide electronic billing and payment technology
used in applications and services Microsoft develops. During that time,
Microsoft will guarantee a minimum of $120 million in revenue to CheckFree.
First Data also will enter into a five-year relationship with CheckFree,
during which time First Data and CheckFree will market and use each other's
products and services. First Data will provide at least $60 million in revenue
and/or cost savings to CheckFree. First Data will sell CheckFree's electronic
billing and payment services to its customers. To further improve operating
costs, CheckFree will use First Data's electronic biller connections and range
of electronic payment products and services.
Immediately prior to closing the transaction, which is subject to
necessary regulatory approval, Microsoft, First Data and Citibank will
collectively contribute $100 million to Transpoint; these funds will be
transferred at closing. Microsoft and First Data each will gain a seat on
CheckFree's Board of Directors. Selected for the positions are Ric Duques,
chairman and CEO of First Data Corporation, and Lewis Levin, who in addition to
being president and CEO of TransPoint is a vice president at Microsoft.
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(SM), 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 89 of the nation's top billers to provide online billing and payment
through its network of partnerships with more than 100 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 820,000 portfolios totaling more
than $480 billion in assets. Software and services provided by CheckFree's
Compliance and Financial Service 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.
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ABOUT TRANSPOINT
TransPoint, established in June 1997, is a joint venture of Microsoft
Corp. and First Data Corp., with Citibank as a minority equity investor.
TransPoint is a leader in the emerging electronic bill presentment and payment
(EBPP) industry with a completely new, seamless e-bills service built from the
ground up. The TransPoint system uses innovative technology and integrates
easily with billers' and banks' existing payment systems. Launched commercially
in April 1999, the TransPoint service is designed to be the fast, easy way for
consumers with Internet access to make all of their payments online from a
single, secure Web site. Consumers can pay their bills at multiple Internet
locations, including the MSN MoneyCentral personal finance online service and
directly through the TransPoint Web site. TransPoint e-bills are also scheduled
to be available at the Web sites of many leading financial institutions in the
coming months. TransPoint is based in Englewood, Colo. More information about
TransPoint is available at http://www.transpoint.com/.
ABOUT FIRST DATA
Atlanta-based First Data Corp. (NYSE: FDC) helps move the world's
money. As the leader in electronic commerce and payment services, First Data
serves more than two million merchant locations, 1,400 card issuers and millions
of consumers, making it easier, faster and more secure for people and businesses
to buy goods and services. With more than 31,000 employees worldwide, the
company provides credit, debit and stored-value card issuing and merchant
transaction processing services; Internet commerce solutions; money transfers
and money orders; and check processing and verification services throughout the
United States, United Kingdom, Australia, Mexico, Spain and Germany. In
addition, its Western Union(R) network includes approximately 82,000 agent
locations with operations in 176 countries. For more information, please visit
the company's web site at www.firstdatacorp.com.
ABOUT MICROSOFT
Founded in 1975, Microsoft (Nasdaq: MSFT) is the worldwide leader in
software for personal and business computing. The company offers a wide range of
products and services designed to empower people through great software - any
time, any place and on any device. More information about Microsoft is available
at www.microsoft.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 statements regarding management's intentions, plans, beliefs,
expectations or projections of the future, and include statements in this
document regarding: the market penetration goal (paragraph 3), the plan to
advance interoperability among electronic billing and payment solutions
(paragraph 7), the opportunities to increase international business (paragraph
17), the closing of the BlueGill acquisition (paragraphs 10 and 18), the closing
of the TransPoint acquisition (paragraph 20), and the impact of the TransPoint
acquisition on CheckFree's results for the current year ending June 30, 2000
(paragraph 20). These forward looking statements involve risks and
uncertainties, including without limitation, whether the planned technology
developments will be successful and accepted by CheckFree's customers; whether
CheckFree can successfully and profitably expand and operate internationally;
whether the conditions to the TransPoint merger, including stockholder,
regulatory and other approvals can be satisfied or obtained to permit the
closing of the acquisition; whether the conditions to the BlueGill merger,
including regulatory and other approvals can be satisfied or obtained to permit
the closing of the acquisition; whether TransPoint and/or BlueGill can
successfully be integrated in
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CheckFree's operations; whether consumers will sign up for and use these
services when and as expected; whether CheckFree's customers, particularly
financial institutions and Internet portals, timely announce, actively offer and
aggressively market such services to their clients and users; whether
CheckFree's business and market assumptions supporting its current revenue and
earnings projections will prove to be accurate; the various risks inherent in
CheckFree's business; and other risks and uncertainties detailed from time to
time in CheckFree's periodic reports filed with the Securities and Exchange
Commission. These SEC filings include Form 10-K for the year ended June 30, 1999
(filed September 24, 1999), Form 10-Q for the quarter ended December 31, 1999
(filed February 10, 2000), and Form S-3 Registration Statement, as amended
(filed January 14, 2000 and amended on January 21, 2000). One or more of these
factors have affected, and could in the future affect, CheckFree'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 CheckFree, or any other person, that the objectives and plans
of CheckFree will be achieved. All forward-looking statements made in this press
release are based on information presently available to management, and
CheckFree assumes no obligation to update any forward-looking statements.
TransPoint is an exclusive U.S. trademark of TransPoint.
Microsoft, BackOffice, MSN, MoneyCentral, Windows and Windows NT are either
registered trademarks or trademarks of Microsoft Corp. in the U.S. and/or other
countries. The names of actual companies and products mentioned herein may be
trademarks of their respective owners.
We urge investors and security holders to read the following document, when it
becomes available, regarding the merger (described above), because it will
contain important information:
CheckFree Holdings Corporation Registration Statement on Form S-4 containing or
incorporating by reference such documents and other information.
This document and amendment to this document will be filed with the United
States Securities and Exchange Commission. When this and other documents are
filed with the SEC, they may be obtained free at the SEC's web site at
www.sec.gov. You may also obtain this document for free (when available) from
CheckFree Holdings Corporation by directing your request to Ms. Tina Moore,
Investor Relations, by e-mail at [email protected] or by phone at (678)
375-1278.
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