Intuit Inc. (NASDAQ: INTU) today announced it has sold its online bill payment and presentment business to Princeton, N.J.-based Princeton eCom.
"We believe online bill payment and presentment represents an important financial revolution for both billers and consumers - taking a time-consuming task and dramatically simplifying it," said Steve Bennett, Intuit's president and chief executive officer.
"Intuit's agreements with Princeton eCom enable us to continue to fulfill this vision, while providing Intuit with a better business model. We think this arrangement provides Princeton eCom with the tools it needs to focus on growing its business. At the same time, it frees up Intuit's investment in the business while also enabling us to benefit from potential revenue upside. This is yet another example of Intuit's commitment to adjust our business portfolio to create the best value for both customers and investors."
Intuit will continue to offer a comprehensive bill management service to customers on both the desktop and Web. Customers will remain Intuit customers, but later in the year, Princeton eCom will become a provider of bill payment and presentment services on both the desktop and the Web.
Under one agreement, Princeton eCom acquired the assets of Intuit's Quicken Bill Manager through the purchase of certain technologies from Intuit and all of the outstanding shares of Venture Finance Software Corp., a wholly owned subsidiary of Intuit. In exchange, Intuit will receive, at Princeton eCom's election in February 2002, either an equity stake in Princeton eCom equivalent to approximately 20 percent of the company's outstanding shares measured shortly after the transaction closes, or cash. The cash payment may come in the form of a single payment in February 2002 equal to the value of the equity stake at that time, or in four annual installments, each in the amount of the value of one-fourth of the equity stake at the time the payment is made. The timing of the payment enables Intuit to comply with other bill payment and presentment commitments. The transaction closed today. Because Princeton eCom is privately held, and because the value of the payments from Princeton eCom could fluctuate over a period of up to four years, Intuit cannot currently calculate a precise dollar value for this component of the transaction.
Intuit and Princeton eCom also entered into other long-term multi-year business agreements.
- Intuit will offer Web-based Quicken Bill Manager-branded service processed by Princeton eCom and will share in revenue from the service.
- Intuit will also receive royalty payments if Princeton eCom licenses the Web-based user interface technology to third parties.
- Intuit will bring Princeton eCom on as a provider of bill payment and presentment processing services for Intuit's Quicken desktop bill management services.
- Princeton eCom will receive the right to use the "Powered by Quicken Bill Manager" mark on third party sites.
The sale of the Quicken Bill Manager business will impact approximately 25 Intuit employees, all of whom will be offered positions at Princeton eCom.
Princeton eCom plans to open an office for those employees in the Silicon Valley.
Anticipated Financial Impact
When Intuit gives financial guidance, it has typically taken into account the expected impact of anticipated transactions that have not yet been disclosed. The company's guidance for fiscal 2001 assumed completion of the transactions with Princeton eCom during the second half of fiscal 2001. It is the company's policy not to confirm, update or otherwise comment on expected financial results except in compliance with Regulation FD.
Background on Princeton eCom
Princeton eCom, the first company to present bills on the Internet, is a leading provider of electronic billing and payment services to more than 950 corporations, banks, financial institutions and payment partners, which in turn offer it to consumers. Princeton eCom enables businesses to present their bills and invoices on the Internet and provides consumers and businesses with the ability to access and pay those bills online, over the phone or using a wireless digital device.