S1 Corporationand Fundtech Ltd.today announced that they have entered into a definitive agreement to combine businesses through a stock-for-stock merger, creating an industry leader in transaction banking solutions. Based on the stock prices at market close on June 24, 2011 for both S1 and Fundtech, the merger is valued at approximately $700 million.

Under the terms of the agreement, Fundtech shareholders will receive 2.72 shares of S1 common stock for each Fundtech ordinary share they own. Upon closing of the transaction, S1 shareholders will own approximately 55 percent and Fundtech shareholders approximately 45 percent of the combined company. The transaction is expected to be accretive to S1's 2012 Non-GAAP earnings per share. Non-GAAP earnings exclude purchase accounting adjustments to deferred revenues as well as stock-based compensation expenses, amortization of intangibles, one-time charges including integration costs and other non-cash charges.

In the first quarter of 2011, the companies generated pro forma combined revenue of $95.0 million, Adjusted EBITDA of $10.4 million and net cash from operating activities of over $32.0 million. As of March 31, 2011, the companies had pro forma combined cash, cash equivalents and marketable securities of $143 million and no debt. As a result of the merger, the companies anticipate annualized pre-tax cost savings of approximately $12 million by the end of 2012 and fully realizable in 2013. Additionally, excluding the expected costs of the merger, both S1 and Fundtech have reaffirmed their previously provided financial guidance for the full year 2011.

The combined company will be headquartered at S1's headquarters in Atlanta, Georgia and will be called Fundtech. Reuven BenMenachem will serve as Executive Chairman of the combined company and Johann Dreyer will serve as Chief Executive Officer. The combined company will have an eight-member Board composed of existing directors from both companies. The Board will have equal representation, with four directors each nominated by S1 and Fundtech.

"This merger will create an industry leader that provides a complete suite of technologically advanced transaction banking solutions," said Reuven BenMenachem, Chief Executive Officer, Fundtech. "The S1 and Fundtech organizations and cultures are very similar in their commitment to deliver innovative products and generate the highest levels of customer satisfaction. The companies have complementary product offerings and extensive cross-selling opportunities which will position the combined company to secure larger contracts and cultivate more strategic relationships with customers."

"The future of the transaction banking industry is highly dependent upon innovation and state-of-the-art solutions and this combination will put us at the forefront of these advancements," said Johann Dreyer, Chief Executive Officer, S1 Corporation. "Both companies have key strengths in technology, products, customers and culture, and we are extremely excited about the opportunities that will be created by combining these businesses. This merger will expand our geographic footprint and enhance our ability to accelerate revenue growth and increase profitability."