On the heels of its $1 billion-plus acquisition of online banking services provider Digital Insight, Intuit Inc. continued bolstering its niche offerings by inking a $142 million deal to acquire payments processor Electronic Clearing House Inc., or Echo.Under the terms of the agreement, the financial and accounting software concern will pay $18.75 per share in cash in exchange for each share of Echo common stock, including shares that are issuable upon exercise of options.
Upon the close of the deal, which at press time was expected during the first quarter, Echo will become a wholly-owned subsidiary of Intuit. The deal was approved by the boards of both companies.
Echo's services are centered on debit and credit card processing - billing its offerings as a "complete solution for the payment processing needs of merchants, banks and collection agencies." The company's services also include check verification, collection, and guarantee services and automatic clearinghouse capabilities.
Echo has two primary subsidiaries: Merchant America, which manages payment card processing, paper and electronic check services, and Internet services for merchants nationwide; and Xpresschex Inc., its check-collection arm.
Echo's automatic clearinghouse capabilities will allow Intuit to round out its payment offering with check services, directing merchants through a single portal for the most commonly used payment methods. The acquisition will also expand Intuit's sales and distribution channels, providing relationships with thousands of customers, including larger enterprise customers, such as retail and hotel chains.
"The acquisition of Echo will expand Intuit's reach and capabilities in the fast-growing payments market," echoed Intuit president and chief executive Steve Bennett, in a statement. "It will enhance our leadership position with small and midsized businesses and help us accelerate growth."
Intuit has been making a strong push into consumer financial services, including its purchase of Digital Insight late in 2006 for $1.35 billion.
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