FIS Modern Banking Platform
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October 01, 2018
JACKSONVILLE, Fla., Oct. 1, 2018 – FIS™ (NYSE: FIS), a global leader in financial services technology, announced today that it has signed an agreement to unwind its joint venture (“JV”) and enter into a significant long term commercial agreement to provide current and new solutions and services to Banco Bradesco, one of the largest financial institutions in Brazil. New services to be provided to Banco Bradesco under the agreement include software application licensing and management, card portfolio migration, business process outsourcing, fraud management, and professional services.
This transaction to unwind the JV will benefit both parties and support the long-term growth of their respective businesses. Without the JV structure and overhead, Banco Bradesco will achieve attractive cost savings, and FIS will benefit from its ability to compete independently in the market. FIS will continue to provide ongoing services to all non-Bradesco customers currently in the JV on a direct basis.
At closing, the parties will spin off all of the JV assets which service the non-Bradesco customers of the JV, and those assets needed to provide the new and continuing services that FIS will then provide directly to Bradesco to a new entity owned by FIS. This will include, at closing, transferring approximately 40% of the current JV workforce to the new FIS entity,
The transactions are subject to approval of the Brazilian Central Bank and Trade Commission (CADE) and customary contractual provisions, and are expected to close by the second quarter of 2019.
As an independent service provider FIS will be empowered to grow its business in Brazil by not requiring any payment sales to be serviced by the JV. This change will provide FIS greater flexibility and a more efficient go-to-market strategy. FIS views the Latin American market as a long-term strategic region for sustained growth and will continue to make investments in the region.
“This is a significant milestone in our ongoing relationship with Banco Bradesco and marks a new stage in FIS’ presence and growth in the Brazilian marketplace,” said Marianne Brown, Global Financial Solutions Chief Operating Officer, FIS. “We look forward to continuing to provide top-quality card processing services to the bank's more than 40 million card customers, and leveraging our local market expertise to grow our business with other Brazilian banks and companies.”
“We’ve enjoyed a successful partnership with FIS for nearly a decade, and we look forward to their continued support of our card payments business,” said Cesário Nakamura, Director of Bradesco.
The annualized expected impact of the deconsolidation of financials from the dissolution of a JV in which FIS owned 51% and Banco Bradesco owned 49% would be to reduce FIS reported revenue by approximately $200 million. Additionally, FIS expects a one-time non-cash pre-tax charge of approximately $100 million, primarily due to the write-off of goodwill and intangibles associated with the transaction, which would reduce net earnings attributable to common stockholders. On a non-GAAP basis, the deconsolidation of financials is not expected to have an impact on organic revenue growth, adjusted EPS or free cash flow.
Additional details regarding this announcement will be provided on FIS’ third quarter earnings call.
FIS is a global leader in financial services technology, with a focus on retail and institutional banking, payments, asset and wealth management, risk and compliance, and outsourcing solutions. Through the depth and breadth of our solutions portfolio, global capabilities and domain expertise, FIS serves more than 20,000 clients in over 130 countries. Headquartered in Jacksonville, Fla., FIS employs more than 52,000 people worldwide and holds leadership positions in payment processing, financial software and banking solutions. Providing software, services and outsourcing of the technology that empowers the financial world, FIS is a Fortune 500 company and is a member of Standard & Poor’s 500® Index. For more information about FIS, visit www.fisglobal.com.
Bradesco is one of Brazil’s largest banks and the biggest insurance company in Latin America. Founded 75 years ago, it is recognized internationally for its financial soundness and the quality of the services provided, with shares listed on the stock exchanges in São Paulo, New York and Madrid. It serves 71,2 million customers, both individuals and companies, with a complete portfolio of products and services through its Retail, Wholesale, Investment Banking, Asset Management, and Insurance operations. Headquartered in Osasco, São Paulo, Brazil, it employs over 97,000 people and besides composing Bovespa Index it is also part of the Dow Jones Sustainability Index and the Bovespa Sustainability Index. For more information about bradesco please visit www.bradescori.com.br.
This press release may contain statements, estimates or projections that constitute “forward-looking statements” pursuant to the safe harbor provisions of the U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from FIS’ historical experience and our present expectations or projections. These risks include, but are not limited to, changes in general economic, business and political conditions, developmental and conversion or de-conversion delays or disruptions inherent in data or system migration, software products, technology and outsourcing solutions, risks of reduction in revenue from the loss of existing and/or potential customers in Brazil, failure to meet financial goals to grow the business in Brazil after the dissolution of the joint venture with Bradesco, or new laws or regulations affecting the banking, retail and financial services industries, changes in the growth rates of the markets for our solutions, and other risks detailed in our filings with the Securities and Exchange Commission (SEC), including the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2017, and subsequent SEC filings. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. FIS undertakes no obligation to publicly update or revise any forward-looking statements.
For More Information
Kim Snider, +1 904.438.6278 Senior Vice President FIS Global Marketing and Communications firstname.lastname@example.org
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