Bottomline buys Intuit commercial unit



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Bottomline Technologies is buying the commercial banking business of financial software giant Intuit Inc. - the company that makes Quicken and Turbo Tax -- the Portsmouth company disclosed Monday.The sale price is $20 million.Bottomline provides financial software of its own, but mainly to larger customers. This deal, expected to be finalized over the next several weeks, would allow it to reach down to 500 of Intuit's bank customers and move into Intuit's "cloud" software technology, said Robert Eberle, president and CEO of Bottomline.The move would increase Bottomline's revenues by $4.5 million over the last half of fiscal 2012 (ending June 30), according to a filing with the U.S. Securities and Exchange Commission, with $4 million of that revenue coming in the fiscal fourth quarter.That should translate into increased earnings per share of 3 to 4 cents in the third quarter and 5 to 7 cents in the fourth quarter. Bottomline said it would provide more financial details in its upcoming earnings call.But more importantly, Eberle said, the deal will give Bottomline enough of a base to provide cloud software to all sorts of banks beyond the newly acquired customers."It will accelerate our strategic plan," he said. "In many ways this is a bigger deal for us, more significant than the deal with Bank of America."That deal, announced in August 2009, did not involve the sale of any assets, but for Bottomline to manage the bank's pay mode system for various businesses.While both Bottomline and Inuit offer many financial software services, this deal focuses on cash management provided through banks.Intuit, a California-based, $3.9 billion company, offers services though many banks' websites. Customers - both individuals and small businesses - can do their taxes online, or download their books on line using Intuit's Turbo Tax, Quickbooks or Quicken software. Some 1,900 banks and credit unions in the United States use Intuit.Bottomline, which pulled in $189 million in revenue in fiscal 2011, also serves companies through their banks, though usually larger companies with multiple sites and a variety of bank accounts. And Bottomline's software at this point is installed on customers' computers.By acquiring Intuit's 500 customers and its cloud technology, "we will accelerate the transition of our commercial banking solution set to the cloud," Eberle said. "This will allow us to better serve not only the large banks we currently focus on, but also to offer an extremely attractive proposition for the many medium-sized and smaller financial institutions which make up the majority of the banking market today. It is an extremely attractive investment opportunity and milestone event for Bottomline."The deal, however, didn't make much of a splash in the investor community. Bottomline's stock was largely unaffected, closing at $28.42 a share, down by 25 cents. -- BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

 

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