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Table of Contents

Lead Story

Health care: When will payments stake its claim?

News

Industry Update

Hats in the ring for ETA awards

All clear for Intuit, ECHO merger

California chomps on gift card leftovers

Acquiring today, a shapshot

L60 at odds with Pipeline

EC interchange ruling: Merchants applaud, MC digs in

Swipe 'n shred, self-service fraud foiler

Features

AgenTalkSM:
Terence Van Horn

Triton layoffs changes, challenges

Tracy Kitten
ATMmarketplace.com

ISOMetrics:
ISOMetrics

Views

Hot, hotter contactless and mobile

David Talach
VeriFone

Education

Street SmartsSM:
Winter profit-land

Dee Karawadra
Impact PaySystem

Drill down to the fine print

Jeff Fortney
Clearant LLC

B2B and B2G: The road ahead

Aaron Bills
3Delta Systems Inc.

POS system power

Maxwell Sinovoi
United Bank Card Inc.

Interviewing for quality

Curt Hensley
CSH Consulting

PCI compliance: Don't forget the little guys

Ken Musante
Humboldt Merchant Services

Company Profile

Credit Cash

New Products

Eco-friendly two-sided receipt printing

2ST thermal receipt printer
NCR Corp.

Wireless terminal for mobile pros

Blue Bamboo H50 POS terminal
Blue Bamboo

Inspiration

Clean slate, new fate

Miscellaneous

POScript

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

January 14, 2008  •  Issue 08:01:01

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All clear for Intuit, ECHO merger

The beginning of 2007 looked bright for small-business software giant Intuit Inc. when it intended to complete the purchase of Electronic Clearing House Inc. in the first quarter. But the deal quickly went south after ECHO disclosed its involvement in a federal probe regarding Internet gambling. But the year ended well for both companies; a second pass at the agreement was confirmed in December 2007.

Intuit, the originator of financial software such as QuickBooks, Quicken and TurboTax, signed an agreement to acquire ECHO. Intuit will pay $17 for each share of ECHO's common stock, including shares issued upon exercise of options. The total purchase price is approximately $131 million, fully diluted.

With the merger, Intuit will have the opportunity to expand its payment offerings by providing check services to customers. It will also be able to offer such solutions to merchants as automated clearing house (ACH); debit, credit and gift cards; and check verification, collection, guarantee and conversion.

"ECHO's leading technology solution and team of payment industry professionals, coupled with Intuit's focus on easy to use solutions, will help the combined company to deliver new and innovative products to customers," said Chuck Harris, ECHO's Chief Executive Officer. In the previous acquisition attempt, Intuit agreed to pay $18.75 per share for ECHO stock, bringing the purchase total to $142 million. However, the agreement was terminated in March 2007 after ECHO settled a federal Internet gambling investigation to the tune of $2.3 million. (For more information, see "Intuit - Echo kaput, fed crackdown afoot," The Green Sheet, April 9, 2007, issue 07:04:01.)

ECHO paid the settlement as a nonprosecution offer for its hand in processing Internet wallets, which allowed consumers to use funds to participate in online gambling. When the Unlawful Internet Gambling Enforcement Act was signed into law in October 2006, ECHO stopped most of its business with such Internet sites and has since ceased all interaction with such sites. Since then, ECHO has refocused the nature of its business, concentrating on compliance with government laws, as well as continued growth. With the changes, ECHO and Intuit agreed that conditions were stable for a successful acquisition.

"Since our last discussions with ECHO, we've continued to survey the market and believe today, as we did then, that ECHO is a great strategic fit for Intuit," said Brad Smith, Senior Vice President and General Manager of Intuit. "We expect ECHO's technology and operational assets will help us accelerate Intuit's growth and strengthen our expanding small business ecosystem that includes the fast-growing payments space." The new agreement is expected to close in the first quarter of 2008 and will be subject to regular reviews, ECHO shareholder approval and other routine closing conditions. Once it has closed officially, ECHO's stock will stop trading and the company will become a fully owned subsidiary of Intuit. The proposed acquisition was approved by both companies' boards of directors.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | USAePay | Super G Capital LLC | Humboldt Merchant Services | Impact Paysystems | Electronic Merchant Systems