ACI Worldwide to Acquire ReD

  ACI Worldwide to Acquire ReD

  Addition of leading e-commerce and fraud prevention tools will provide an
                 unrivaled merchant retail payments solution

Business Wire

NAPLES, Fla. -- July 21, 2014

ACI Worldwide (NASDAQ: ACIW), a leading global provider of electronic payment
and banking solutions, and Retail Decisions (ReD), a leader in fraud
prevention solutions, today announced that they have entered into a definitive
transaction agreement. Under the terms of the agreement, ACI Worldwide will
acquire ReD for an all-cash purchase price of $205 million and expects the
transaction to close in the middle of the third quarter, 2014.

Brookwood, England-based ReD is a leading e-commerce and fraud prevention
company serving the payments industry. The company’s suite of solutions - ReD
Shield®, ReD Fraud Xchange, ReD PRISM®, ReD Alerts, ReDi, ReD1 Gateway and
LiveProcessor - helps customers drive up revenues while reducing fraud losses
and increasing the efficiency of their fraud management teams. ReD serves
retailers, issuers, acquirers, processors and switch networks globally.

ReD has a compelling SaaS and transaction-based financial model, with over 80
percent recurring revenue. The company, with its multi-dimensional detection
engine and proprietary global fraud database, generates high customer
retention rates and strong revenue growth.

As payments increasingly move online, the focus on card-not-present fraud
prevention will also increase. According to market research from eMarketer in
a February 2014 report, the global e-commerce market is projected to grow over
17 percent each year, representing a total value of nearly $2.4 trillion by
2017. Further, as the U.S. moves toward adoption of EMV standards, fraud
attempts are expected to shift toward the card-not-present online segment.
According to Julie Conroy, Research Director, Aite Group, "Merchants around
the world, and banks for that matter, should prepare for a very sharp increase
in card-not-present fraud. Without significant preventative efforts by issuers
and merchants alike, we're going to see pretty dramatic increases."

ReD’s technology and software solutions bring ACI a proven, global SaaS-based
e-commerce offering with integrated fraud detection/management. With ReD, ACI
will become the market leader in the rapidly growing payments risk management
market across multiple segments globally.

“Retailers are currently operating disparate systems for their online, mobile
and point-of-sale operations,” said Philip Heasley, President and CEO, ACI
Worldwide. “ACI and ReD together have an unrivaled merchant retail solution –
global, omni-channel with integrated fraud management built on Universal
Payments technology. This solution will not only guarantee a consistent,
unified customer experience in any retailer modality, but also will be a key
part of our real-time commerce, any-to-any transaction strategy. Additionally,
ReD’s consortium models, business intelligence offerings, modeling and risk
analyst expertise will both complement and enhance our issuer risk management
solutions.”

“We are extremely excited to integrate our leading technology into ACI’s
revolutionary Universal Payments,” said Paul Stanley, CEO, ReD. “Together, we
will deliver a much more powerful offering that will materially expand the
adoption of integrated fraud prevention solutions.”

In related news, ACI separately announced today that it has bolstered its
Universal Payments (UP) strategy, delivering an unrivaled merchant retail
solution to combat fraud.

Terms of the Transaction
ACI Worldwide and ReD have entered into a definitive transaction agreement
under which ACI Worldwide will acquire ReD for $205 million in cash. ACI plans
to use the existing credit facility and an incremental term loan. The
transaction is subject to customary closing conditions. BofA Merrill Lynch is
acting as financial advisor to ACI Worldwide in connection with the
transaction and is also lead arranger providing a commitment for 100 percent
of the financing. William Blair is acting as financial advisor to ReD.

If closed in the middle of the third quarter, 2014, we expect ReD will
generate approximately $18 million in revenue and $4 million in adjusted
EBITDA for the remainder of 2014. Further details of the financial impact of
this transaction will be provided after closing. An accompanying investor
presentation can be found on our website at http://investor.aciworldwide.com/.

About ACI Worldwide
ACI Worldwide, the Universal Payments company, powers electronic payments and
banking for more than 5,000 financial institutions, retailers, billers and
processors around the world. ACI software processes $13 trillion each day in
payments and securities transactions for more than 250 of the leading global
retailers, and 21 of the world’s 25 largest banks.Through our comprehensive
suite of software products and hosted services, we deliver a broad range of
solutions for payment processing; card and merchant management; online
banking; mobile, branch and voice banking; fraud detection; trade finance; and
electronic bill presentment and payment. To learn more about ACI, please visit
www.aciworldwide.com. You can also find us on Twitter @ACI_Worldwide.

About ReD
ReD is a world leader in fraud prevention, with solutions that are present at
every stage of the payments value chain, supporting merchants and PSPs,
issuers and acquirers, processors and switch networks in the fight against
fraud. ReD protects billions of transactions across multiple channels and
payment types with proprietary technology that is underpinned by world class
fraud and risk analysts and pooled data from more than 190 countries. ReD
serves customers from multiple sectors and across six continents from offices
in Australia, China, Dubai, South Africa, the United Kingdom and the United
States, and through partners around the globe. Visit www.redworldwide.com for
further information about ReD. ReD is a portfolio company of Palamon Capital
Partners.

Forward-Looking Statements
This press release contains forward-looking statements based on current
expectations that involve a number of risks and uncertainties. Generally,
forward-looking statements do not relate strictly to historical or current
facts and may include words or phrases such as “believes,” “will,” “expects,”
“anticipates,” “intends,” and words and phrases of similar impact. The
forward-looking statements are made pursuant to safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.

Forward-looking statements in this press release include, but are not limited
to, statements regarding expected incremental revenue and adjusted EBITDA
generated from this transaction.

All of the foregoing forward-looking statements are expressly qualified by the
risk factors discussed in our filings with the Securities and Exchange
Commission. Such factors include but are not limited to, increased
competition, the performance of our strategic product, UP BASE24-eps, demand
for our products, restrictions and other financial covenants in our credit
facility, consolidations and failures in the financial services industry,
customer reluctance to switch to a new vendor, the accuracy of management’s
backlog estimates, the maturity of certain products, our strategy to migrate
customers to our next generation products, ratable or deferred recognition of
certain revenue associated with customer migrations and the maturity of
certain of our products, failure to obtain renewals of customer contracts or
to obtain such renewals on favorable terms, delay or cancellation of customer
projects or inaccurate project completion estimates, volatility and disruption
of the capital and credit markets and adverse changes in the global economy,
our existing levels of debt, impairment of our goodwill or intangible assets,
litigation, future acquisitions, strategic partnerships and investments, risks
related to the expected benefits to be achieved in recent acquisitions and
ReD, the complexity of our products and services and the risk that they may
contain hidden defects or be subjected to security breaches or viruses,
compliance of our products with applicable legislation, governmental
regulations and industry standards, our compliance with privacy regulations,
the protection of our intellectual property in intellectual property
litigation, the cyclical nature of our revenue and earnings and the accuracy
of forecasts due to the concentration of revenue-generating activity during
the final weeks of each quarter, business interruptions or failure of our
information technology and communication systems, our offshore software
development activities, risks from operating internationally, including
fluctuations in currency exchange rates, exposure to unknown tax liabilities,
and volatility in our stock price. For a detailed discussion of these risk
factors, parties that are relying on the forward-looking statements should
review our filings with the Securities and Exchange Commission, including our
most recently filed Annual Report on Form 10-K, Registration Statement on Form
S-4, and subsequent reports on Forms 10-Q and 8-K.

Contact:

ACI Worldwide
John Kraft, 239-403-4627
Vice President, Investor Relations & Strategic Analysis
john.kraft@aciworldwide.com
or
For press inquiries:
Dan Ring, 781-370-3600
dan.ring@aciworldwide.com
 
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