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Filed by CheckFree Holdings Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: TransPoint LLC
Commission File No. 0-26802
[LOGO]MICROSOFT(R)
[LOGO]CHECKFREE(R) [LOGO]FIRST DATA(R)
FOR IMMEDIATE RELEASE
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<S> <C> <C>
CheckFree Media Relations: Microsoft Media Relations: First Data Corp.Media Relations:
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Judy Morris Barb Hemberger, Shandwick Caroline Hoke
(678) 375-1595 (425) 703-6625 (770) 857-7178
[email protected] [email protected] [email protected]
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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]
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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."
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"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 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:
- Consumers have more options and can receive their bills
wherever they choose on the Internet;
- Billers gain the broadest distribution possible without using
multiple systems;
- 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
- 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.
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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.
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:
- 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.
- 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.
- 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.
- 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.
- 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.
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"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."
"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.
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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.
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;
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whether TransPoint and/or BlueGill can successfully be integrated in 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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