Metavante Technologies Inc. (MV) in early February reported earnings for its first full year of operation as a public company after being spun-off from Marshall & Ilsley Corp. (MI). The spin-off was accomplished for the purpose of aiding the growth of both Metavante and M&I by easing their access to capital.
Metavante, headquartered in Milwaukee employs 5,900 people world-wide with operations in 32 United States cities and in Toronto and London. The company is a leading provider of banking and payment technologies to financial service firms and businesses throughout the world.
In its first full year as a public company, Metavante grew revenues by nearly 50% from the level prior to becoming independent. Revenues increased to more than $1.7 billion and net income grew to over $147 million.
As financial service firms strive to reduce fixed costs during the downturn, they are outsourcing their operations to third party vendors.
Metavante provides a wide range of account management services, including processing deposits, check processing, electronic funds transfers, consumer health care payments, ATM and PIN system management and ACH origination.
Metavante completed several significant acquisition in 2008, including the purchase of London-based Nomad, a processor of prepaid and debit card bank services which is providing Metavante with a platform from which to grow its European operations.
The company also acquired RepayMe, a web-based system for individuals to use in requesting reimbursement for eligible expenses under employee benefit programs, adding to Metavante’s health services solutions area.
Metavante has relationships with 97 of the top 100 banks in the US. It is the largest core processor for banks with $6 to $60 billion in assets, and has the nation’s second largest electronic bill payment platform
Metavante’s competitors include Fiserv (FISV) and Fidelity National Information Services (FIS). While each is larger than Metavante, neither has enjoyed the growth that Metavante experienced in the past year.
Metavante has a rather large debt to equity ratio of 4.81. While in line with the industry average of 4.95, the ratio far out-paces the S&P 500 average of 0.3. The company’s current ratio however is 1.3 while the industry averages 0.3.
Company CEO Frank Martise noted that the company exceeded expectations for the year, though expecting a difficult year ahead. With 88% of the company’s revenues in a recurring category form long term contracts, Metavante has the foundation to absorb the impact of the economic recession. MV is currently trading at $16.81, nearly 50% above its low for the past 52 weeks.
This article was written by Jamie Dlugosch, contributor to InvestorPlace Media. For more actionable insights likes this, visit www.InvestorPlace.com.
