UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 26, 2007
METAVANTE HOLDING COMPANY
(Exact name of registrant as specified in its charter)
| Wisconsin | 001-33747 | 39-0968604 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
770 North Water Street
Milwaukee, Wisconsin 53202
(Address of Principal executive offices, including Zip Code)
(414) 357-2290
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation FD Disclosure.
On October 26, 2007, Metavante Holding Company (“Metavante”) made available on its website a presentation that will be discussed in connection with meetings with prospective investors and financial analysts. This presentation is furnished herewith as Exhibit 99 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
| Exhibit No. | Description | |
| 99 | Investor Presentation |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| METAVANTE HOLDING COMPANY | ||||
| Date: October 26, 2007 | /s/ Gregory A. Smith | |||
| Name: | Gregory A. Smith | |||
| Title: | President | |||
3
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99 | Investor Presentation |
E-1
 Equity Road Show Investor Presentation October/November 2007 Exhibit 99 |
 1 ©2007 Metavante Corporation. All rights reserved worldwide. Forward-Looking Statements and Non-GAAP Financial Information Forward-Looking Statements This presentation contains certain forward-looking statements and other information
based on Metavante management's current expectations. These
forward-looking statements include all statements other than those made
solely with respect to historical fact. Additionally, this presentation contains graphical information regarding results of current or future fiscal periods, which representations
are not intended, and should not be interpreted, to represent specific
estimates regarding these periods. Numerous risks, uncertainties and
other factors may cause actual results to differ materially from those expressed in any forward-looking statements or information. These factors include, but are not
limited to, risks and other considerations that are set forth in the “Risk Factors,” “Description of New Metavante,” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” sections of the definitive proxy statement/prospectus--information statement contained in the
registration statement on Form S-4 of Metavante Holding Company
(Registration No. 333-143143), which was declared effective on September 14, 2007, and other reports filed by Metavante Holding Company with the Securities and Exchange Commission. Metavante undertakes no obligation to revise or update any
forward-looking statements or information, or to make any other
forward-looking statements or information, whether as a result of new
information, future events or otherwise. Non-GAAP Financial
Information This presentation contains certain non-GAAP financial
information. We refer you to the Appendix for the reconciliation
of the non-GAAP measures to GAAP measures along with a discussion of why the management believes those measures are useful to investors.
|
 2 ©2007 Metavante Corporation. All rights reserved worldwide. Transaction description – Sponsored spin-off from Marshall & Ilsley Corporation (M&I) – Metavante becomes independent publicly traded company – 75% owned by current M&I shareholders and 25% by Warburg Pincus Timeline – Listing on NYSE with “MV” ticker symbol – When-issued trading begins on October 29 – Closing and funding on November 1 – Regular-way trading begins on November 2 1 Implied by Warburg Pincus purchase price of $625 million for 25% of Metavante and
$1,750 million of debt; actual shares may trade at a different price Enterprise value Pro forma debt Implied equity value $2,500 $4,250 $1,750 Value $mm $1,875 $625 Transaction Overview 1 |
 3 ©2007 Metavante Corporation. All rights reserved worldwide. Company Overview Founded in 1964 as the data processing division of Marshall & Ilsley Growing over 43 years to more than $1.5 billion in annual sales Headquartered in Milwaukee: 5,500 employees at 35 locations in the U.S. and Canada Loyal and growing client base: 8,600 clients in 32 countries An Industry Leader… A Proud Past … … Providing Mission Critical Solutions … And a Dynamic Present 8,600 clients, including relationships with nearly all of the top 100 U.S. Banks 908 core clients representing over 12% of total bank assets, or $1 trillion More than 4,000 financial institutions on the nation’s first operational check image exchange network System backbone for over 22 million client accounts Processing 74 million debit cards or 20% of total market 200 million annual bill payments Nationwide coverage of ATMs and POS locations through NYCE EFT/PIN-debit network Payment Solutions Group 60% Financial Solutions Group 40% 2007 Revenue |
 4 ©2007 Metavante Corporation. All rights reserved worldwide. Highly Experienced Management Team Frank R. Martire, President and CEO Joined Metavante in 2003 Fiserv; Citigroup Information Resources Michael D. Hayford, Sr. EVP and Chief Operating Officer Joined Metavante in 1992 Andersen Consulting (now Accenture) Frank G. D’Angelo, Sr. EVP; President, Payment Solutions Group Joined Metavante in 1997 Diebold; Burroughs Corporation, now Unisys Donald W. Layden, Jr., Sr. EVP; Corporate Development Returned to Metavante in 2004 NuEdge; Fiserv Debra Bronder, EVP; Human Resources Joined Metavante in 1997 Various human resources and consulting roles; most recently at James & Scott Associates and Johnson Controls Timothy Oliver, Sr. EVP; Chief Financial Officer Joined Metavante in 2007 Rockwell Automation; Raytheon; Honeywell; Kidder Peabody; and Bear Stearns Brian Hurdis, Sr. EVP; President, Metavante Image Solutions Joined Metavante in 1999 Firstar Corporation Paul Danola, Sr. EVP; President, Financial Institutions Group Joined Metavante in 2003 Call Solutions; Fiserv, Inc. Gary Refinski, EVP and Chief Information Officer Joined Metavante in 1983 Management positions in both development and sales support areas Rachel Landrum, EVP; President, Bankway Joined Metavante in 2004 Kirchman Corp. Norrie Daroga, EVP; Chief Administrative Officer and Corporate Secretary Joined Metavante in 1997 Quarles & Brady Steve Rathgaber, EVP; President, Network Solutions Joined Metavante in 2004 in connection with the acquisition of NYCE Payment Network, LLC NYCE EVP and COO for 9 years prior to the acquisition Jamie Geschke, EVP; President, Financial Solutions Group Joined Metavante in 1984 Management positions in product development, network operations, technology support and customer relations Jim Bolton, Sr. EVP; Enterprise Solutions Group • Joined Metavante in 2007 • Accenture |
 5 ©2007 Metavante Corporation. All rights reserved worldwide. US Core Banking IT Spending ($ millions) Positive Industry Fundamentals Source: Financial Insights and IDC Company 2006 Source: Federal Reserve 2006 – Kansas City; Feb/Mar 2004 – Nilson Reports, Florida State University, Unisys 2000 2010 Check 46% 22% Paper settlement 37% 9% Image 9% 13% Cash 19% 17% Credit card 24% 30% Debit 7% 16% Pin 3% 10% Signature 4% 6% Electronic transfer 4% 15% U.S. Payment Trends A Steady Growth Market… …And a Rapidly Changing Market |
 6 ©2007 Metavante Corporation. All rights reserved worldwide. Leverageable Expertise • Commitment to service delivery • Scalable model • Enterprise integration • Continuous infrastructure investment Customer Intimacy • Beyond satisfaction to loyalty • Unique relationship management model • Broad user group networks • Continuous management engagement Proven Track Record of Execution • Strong industry knowledge • Conversion and migration experts • Professional services • Business transformation capabilities Strategic M&A • Disciplined process • Successful management and product • Add product, distribution, or scale The combination of Metavante’
s technical and financial
services expertise…helped Bank of Hawaii achieve substantial bottom-line results. - Al Landon, Chief Executive Officer, Bank of Hawaii “ ” We’ve
never had a vendor leave at the end of an engagement
where our team became so emotional – usually it was just ‘goodbye’. With Metavante it was truly a partnership. They were part of our team, almost like family…the part of the family that you look forward to their return. - Mark Bitter, Senior Vice President, Fifth Third Bank “ ” We have high expectations for all our partners. We want to out-product the small banks and out-service the big banks…Metavante can help us compete in this way. - Scott McGlaun, Chief Information Officer, Synovus “ ” Operational Excellence |
 7 ©2007 Metavante Corporation. All rights reserved worldwide. Robust Business Model 88% Recurring Revenue Data Processing Software Maintenance Professional Services 12% New Revenue Software License Professional Services Equipment Sales Buyouts / Other High Percentage of Recurring Revenue… … And Increasingly Diversified Customer Base 8 8 % Top 50 Banks (over $30B) Regional Banks ($1B - $30B) Other FIs Community Banks (under $1B) Financial Institutions Healthcare Government International By Client Vertical / Market Segment By Relative Size |
 8 ©2007 Metavante Corporation. All rights reserved worldwide. Company Overview Payment Solutions Group Financial Solutions Group ~40% of Revenue ~60% of Revenue Professional Services & Consulting Business Process Outsourcing Operations Infrastructure |
 9 ©2007 Metavante Corporation. All rights reserved worldwide. Financial Solutions Group Customer information systems Branch management solutions Selling and servicing technologies Call center solutions Wealth management and processing solutions Performance measurement Portfolio management Cash sweep services and funds access Integrated banking solution Bankway solution Loan servicing Loan origination Deposit account management Cash and float management Account access, information and analysis Payables management Consumer eBanking Online account creation Business internet banking Regulatory compliance Business continuity planning Information security assessments Fraud risk mitigation Core Banking Commercial Treasury eBanking Risk and Compliance Trust Customer Relationship Management Professional Services & Consulting Business Process Outsourcing Operations Infrastructure |
 10 ©2007 Metavante Corporation. All rights reserved worldwide. Financial Solutions Group Revenue and Operating Margin Metavante Opportunities Provide technology that enables banks to compete Drive back-office simplification Integration of all customer delivery points Front office–back office integration Workload flexibility/cost reduction Demand for systems rationalization, scalable solutions and outsourcing Demand for platform integration across channels and lines of business Need flexibility to add or change products and pricing structure Increased outsourcing by financial institutions to enhance competitive position Growth Drivers Differentiators 10% CAGR Single platform Integrated products Market-focused solutions Fully integrated payment offering |
 11 ©2007 Metavante Corporation. All rights reserved worldwide. Payment Solutions Group Debit/prepaid card processing Card personalization Credit card processing Closed loop debit Prepaid card/account processing Issuing NYCE network Balance transfer services Consumer bill payment ACH solutions Electronic bill presentment ID/eligibility cards Flexible savings accounts (FSA) Health savings accounts (HSA) Administrator solutions Explanation of benefits Payment Network ePayment Healthcare Payment Merchant processing Government payments Biller direct payments ATM driving and acquiring Acquiring Check processing Check image solutions Distributed capture Document image solutions Endpoint exchange network Image Professional Services & Consulting Business Process Outsourcing Operations Infrastructure |
 12 ©2007 Metavante Corporation. All rights reserved worldwide. Payment Solutions Group Revenue and Operating Margin Metavante Opportunities Drive transformation from paper to electronic High-value targeted products for specialty markets Innovative integrated services enabled by processing breadth Rapid response to legislative change and opportunity Dramatic shift in U.S. payment methods from paper to cards and electronic Shift from checks to check images Integrated solutions are increasingly beating monoline product providers New legislative mandates and opportunities Growth Drivers Differentiators 22% CAGR Broad set of payment solutions Integrated payments with financial account solutions Flexible solutions that enable clients to rapidly deliver new products with low cost of entry Comprehensive fraud monitoring and settlement functions High-levels of customer satisfaction and loyalty |
 13 ©2007 Metavante Corporation. All rights reserved worldwide. Go to Market Strategy Operations Infrastructure Business Process Outsourcing Prof. Services & Consulting Image Healthcare Payment Payment Network ePayment Acquiring Issuing CRM Risk and Compliance Trust Commercial Treasury eBanking CoreBanking International and Other Healthcare Government Community Bank and Credit Union Large Bank Primary Secondary Client Verticals / Market Segments Client Verticals / Market Segments |
 14 ©2007 Metavante Corporation. All rights reserved worldwide. Growth Opportunities Penetrate Large Bank Segment Business Process Outsourcing • Leverage existing relationships to expand size of wallet • Convert fixed cost structure to variable • Create flexible workload management Expand Core Relationships • Leverage strong client engagement to expand relationships • Cross-sell products and services to maximize share of wallet • Offer value-added operational and advisory services • Dedicated relationship management teams focused on top 50 financial institutions • Next-generation core development (Temenos) • Strong point solutions increase wallet share Emerging Payment Markets • Expand healthcare payment offerings • Expand government payment offerings • Continue to introduce innovative new payment capabilities (e.g., mobile) Expand Globally • Leverage existing offerings for international markets • Develop entry and localization strategy • Identify acquisition candidates |
 15 ©2007 Metavante Corporation. All rights reserved worldwide. Strategic Mergers and Acquisitions Disciplined and repeatable process – 25 transactions since 1998 – Internal rate of return on equity investment of ~30% from 2003 to 2006 – Return on total investment of nearly 20% from 2003 to 2006 Successful management and product integration – Delivered business case targeted net income – Created an unparalleled product/solution offering – Influenced core decision wins Characteristics of target companies – Catalytic to growth – Strategically consistent – Solid financial performance – Strong management – Bolt-on or easily integrated |
 16 ©2007 Metavante Corporation. All rights reserved worldwide. Strategic Mergers and Acquisitions Financial Solutions Group 1 20% ownership in Firstsource Payment Solutions Group 2 51% ownership of Everlink Network Solutions Healthcare Solutions EFT S olutions ePayment Solutions Strategic Objective NYCE Everlink Response Data CGI EFT Assets PSI MBI Benefits AdminiSource Valutec LINK2GOV Fill product gap Enhance product line Build businesses with adoption growth models Enhance economies of scale Expand customer base for cross-sell 07/30/04 07/30/04 09/08/04 01/04/06 11/14/03 06/22/05 01/03/06 01/17/07 11/18/05 2 Banking Solutions BPO Image Solutions Risk and Compliance Solutions Strategic Objective Kirchman Brasfield NuEdge GHR Firstsource¹ VICOR AFS Endpoint Exchange Network TREEV VECTORs gi Prime Fill product gap Enhance product line Build businesses with adoption growth models scale Expand customer base for cross-sell 05/27/ 04 10/06/05 10/19/04 08/11/05 04/21/06 09/01/06 07/01/04 07/01/04 08/08/05 11/22/ 04 02/09/05 Enhance economies of Date closed Date closed |
 17 ©2007 Metavante Corporation. All rights reserved worldwide. Revenue and Earnings Revenue EBITDA Cash Net Income 5 year CAGR approx. 18% Growth led by the Payment Solutions segment 5 year CAGR approx. 34% Consistent upward trend in margin rate since 2002 5 year CAGR over 20% Significant margin expansion since 2002 $ millions $ millions $704 $770 $1,015 $1,285 $1,504 $ millions $205 $177 $278 $369 $414 $47 $57 $88 $135 $181 $ millions |
 18 ©2007 Metavante Corporation. All rights reserved worldwide. Capital Allocation Allocation of Capital Capex as % of Revenue Free Cash Flow Conversion Substantial investment in acquisitions since 2004 Successful integration of acquired businesses contributed to strong financial performance Significant decline in capital expenditures as a percent of sales since 2002 Not a physical capital intensive business model Increase in 2007 related to next generation core development Consistently strong free cash flow conversion Not a working capital intensive business model Acquisitions (cash and equity) Equity investments Capital expenditures $ millions $101 $147 $1,078 $444 $282 14.3% 13.4% 8.6% 8.7% 7.3% 91% 96% 161% 116% 114% |
 19 ©2007 Metavante Corporation. All rights reserved worldwide. Cash Flow Priorities Prudent maintenance of debt rating and debt holder commitments Fund organic growth opportunities Fund acquisition strategy Repay debt or repurchase shares based on economic circumstances 1. 2. 3. 4. |
 20 ©2007 Metavante Corporation. All rights reserved worldwide. Financial Outlook Double-digit growth >$140M >$200M Cash net income (3) Double-digit growth >$120M >$180M Net income Modest margin expansion, consistent with positive multi-year trend Interest expense, transaction costs, and special items Strong margin expansion vs. easy ‘06 comps. Profitability -- ~6% ~6% Total 4% to 6% ~4% ~4% Organic Revenue growth 2007 Historical (1) 2007 Adjusted (2) Preliminary 2008 Outlook (1) This guidance is presented on a basis consistent with the business plan information
included in the registration statement on Form S-4 of Metavante Holding Company (the S- 4). Therefore, this guidance does not include transaction costs or other pro forma effects of the transaction. (2) This adjusted guidance reflects the impact to net interest expense in connection with the spinoff transaction. The interest adjustment is based on the pro forma adjustment included in the S-4 (~ $59 million, net of tax). (3) See Appendix for a discussion of cash net income. The difference between net
income and cash net income of approximately $20 million relates to acquired intangible amortization, net of tax (~$16 million) and stock-based compensation, net of tax
(~$4 million). |
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 22 ©2007 Metavante Corporation. All rights reserved worldwide. Appendix ©2007 Metavante Corporation. All rights reserved worldwide.
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  23 ©2007 Metavante Corporation. All rights reserved worldwide. Historical Income Statements ($ millions) 2002 2003 2004 2005 2006 Financial Solutions Group 420.5 $ 426.0 $ 484.3 $ 544.6 $ 606.6 $ Payment Solutions Group 283.3 343.6 531.1 740.4 897.6 Total Revenue 703.8 $ 769.6 $ 1,015.4 $ 1,285.0 $ 1,504.2 $ Segment Operating Income Financial Solutions Group $ NA $ NA 69.5 $ 108.1 $ 145.1 $ Payment Solutions Group NA NA 150.9 219.8 267.4 Total 72.7 74.4 220.4 327.9 412.5 Corporate/other NA NA (73.9) (99.4) (140.5) Other (income) expense NA NA (20.7) (35.7) (31.5) Income before income taxes 68.9 69.7 125.8 192.8 240.5 Allocated income tax provision 27.2 18.5 49.0 73.3 80.4 Net Income 41.7 $ 51.2 $ 76.8 $ 119.5 $ 160.1 $ % margin 5.9% 6.7% 7.6% 9.3% 10.6% Note: Effective in the third quarter of 2007, Metavante transferred its Image Solutions
business from the Financial Solutions segment to the Payment Solutions
segment. Prior periods have been restated for this transfer. |
 24 ©2007 Metavante Corporation. All rights reserved worldwide. Non-GAAP Measures This presentation contains non-GAAP financial measures such as “EBITDA”,
“Cash Net Income” and “Free Cash Flow”. These measures should not be considered
substitutes for GAAP measures. The following is a specific discussion of each
measure: Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and EBITDA
Margin Metavante’s management believes that “EBITDA” and “EBITDA margin” are useful for evaluating performance against peer companies within its industry, as well as providing investors additional transparency to
a financial measure used by management in its financial and operational
decision-making. In addition, Metavante utilizes EBITDA and EBITDA margin in its evaluation and determination of the price of potential acquisition candidates, to
explain trends in its operating performance and provides useful information
about its ability to incur and service indebtedness. Also, EBITDA is expected to be included in the financial covenants applicable to Metavante’s credit facilities. EBITDA, as defined in the financial covenants, also excludes certain non-cash charges, such as impairment charges and stock option
expense in addition to the items noted above. Cash Net Income Metavante’s management defines “cash net income” as net income before (1) share-based compensation expense, net of tax, and (2) the amortization of intangible assets resulting from business acquisitions
(net of tax). Metavante’s management believes that cash net income is
useful for evaluating performance against peer companies within its industry, as well as providing investors additional transparency to a financial measure used by management in
its financial and operational decision-making. Metavante’s
definition of cash net income may differ from definitions used by other
companies. Free Cash Flow Metavante’s management defines “free cash flow” as cash flows provided by operating activities less capital expenditures. Management believes that free cash flow and free cash flow conversion (defined as free
cash flow divided by net income) provide useful information to investors
regarding Metavante’s ability to generate cash from business operations that is available for acquisitions and other investments, and debt service. This
definition of free cash flow may differ from definitions used by other
companies. |
 25 ©2007 Metavante Corporation. All rights reserved worldwide. ($ millions) 2002 2003 2004 2005 2006 Reconciliation of Net Income to EBITDA: Net income 41.7 $ 51.2 $ 76.8 $ 119.5 $ 160.1 $ Add: Interest expense, net 3.8 4.6 21.8 37.3 28.6 Allocated income taxes 27.2 18.5 49.0 73.3 80.4 Depreciation and amortization 104.4 130.4 130.5 139.1 144.4 EBITDA 177.1 $ 204.7 $ 278.1 $ 369.2 $ 413.5 $ % of Revenue 25.2% 26.6% 27.4% 28.7% 27.5% Reconciliation of Net Income to Cash Net Income: Net income 41.7 $ 51.2 $ 76.8 $ 119.5 $ 160.1 $ Add: Acquisition intangible amortization, net of tax 1.9 2.1 6.5 10.8 16.0 Stock-based compensation, net of tax 3.7 3.7 4.4 4.6 4.9 Cash net income 47.3 $ 57.0 $ 87.7 $ 134.9 $ 181.0 $ Reconciliation of Cash Flows from Operating Activities to Free Cash Flow: Cash flows from operating activities 138.8 $ 152.7 $ 211.2 $ 250.3 $ 292.4 $ Less capital expenditures Premises and equipment (20.4) (28.1) (27.6) (44.2) (37.4) Software and conversions (80.4) (75.5) (59.8) (67.7) (72.0) Free cash flow 38.0 $ 49.1 $ 123.8 $ 138.4 $ 183.0 $ Conversion (% of net income) 91% 96% 161% 116% 114% Reconciliation of Non-GAAP Measures |
   26 ©2007 Metavante Corporation. All rights reserved worldwide. EBITDA Margin Trend 25.2% 26.6% 27.4% 28.7% 27.5% |