Willis Stein Finds Aurum Exit –

Willis Stein & Partners is exiting its Aurum Technology financial services IT platform, selling the company to Fidelity National Financial in a deal valued at $305 million. According to the terms of the deal-expected to close this month-the purchase price will be made up of $175 million in cash and $130 million in stock.

Aurum Technology was born out of Willis Stein’s 2000 acquisition of EDS’s community bank outsourcing business. At the time, the firm paid approximately $120 million for the EDS unit, using equity from its $840 million Willis Stein & Partners II fund.

Aurum provides IT outsourcing services to the financial services community, with an offering that includes software development and licensing, ATM processing, branch automation, data warehousing, Internet banking and third-party systems integration, among other IT services. The company has more than 1,100 customers, and in 2003, logged over $193 million in revenues.

Willis Stein Managing Director Daniel Gill said that while in the Willis Stein portfolio, Aurum was able to benefit from its breadth of offerings. “One trend that really helped Aurum was that a lot of banks tried to consolidate their technology offerings into a single vendor,” he said. “And this allowed us to leverage the products Aurum sold to its existing customers.”

The firm also relied on add-on acquisitions to help spur growth, buying Utah-based Computer Consultants Corp. and the Orlando-based Data Dimensions.

In 2002, Willis Stein installed BISYS Group Veteran Paul Bourke as the company’s new chief executive, replacing Ray Maturi, who stayed on as vice chairman. The reshuffling came about from Maturi’s decision to retire rather than any designed shift in direction, according to Gill.

For Fidelity, the addition of Aurum will bolster the company’s reach in the community bank customer segment, more than doubling its exposure to that area. Additionally, the deal will also give Fidelity a presence in the credit union market by adding Aurum’s more than 600 customers in the space.

The transaction marks Fidelity’s second acquisition in the past month, and follows the purchase of Sanchez Computer Associates. Together with the Aurum buy, the two deals will boost Fidelity’s processing operations revenue by over $300 million, representing an increase of 30 percent.

Investors and analysts seemed to universally applaud the acquisition of Aurum for Fidelity. Keefe, Bruyette & Woods Analyst Geoffrey Dunn said in a research note to clients, “We view this transaction as the most important strategic deal that the company has done in this space since Alltel… FIS is now able to provide core processing services to every segment of the financial services market, from de novo banking to credit unions, to community and regional banks to national and global financial institutions.”

Willis Stein would not comment on the investment’s return.