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EDS to sell ATM unit to Fiserv

Struggling IT services vendor Electronic Data Services is to sell its funds transfer unit, Consumer Network Services (CNS), to...

Struggling IT services vendor Electronic Data Services is to sell its funds transfer unit, Consumer Network Services (CNS), to Fiserv for $320m (£202.5m).

The deal is expected to close by the end of the year, pending regulatory review. Processing and services revenues from this business in 2003 should generate between $150m and $160m for Fiserv.

The acquisition will generate much-needed cash for EDS, which announced in September that its earnings would be well below expectations.

Last month, EDS said it would cut as many as 5,500 jobs and reduce costs by lowering overhead expenses by $75m and divesting itself of non-core, non-strategic assets.

Purchasing CNS will add to Fiserv's automatic teller machine processing business, which is growing because of the increase in debit transactions at the point of sale, said Ken Jensen, a spokesman for Fiserv, which provides integrated data processing services and information management systems to the financial industry.

CNS processes more than 2.4 billion electronic funds transfers annually and operates 13,170 ATMs. EDS said that although CNS was profitable, it was not core to EDS's long-term growth strategy

When the deal is completed, Fiserv will process approximately 4 billion electronic ATM and point-of-sale transactions annually.

The combined organisation will employ approximately 850 people and will be one of the top five processors of funds transfer services in the financial industry. Fiserv will continue to provide these services to financial institution clients of EDS.

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