Metavante has a pile of cash now, but does it have a list of good acquisition candidates?

Implications: With excess cash from the seperation, what are the possible acquisition opportunities for Metavante.

Analysis:  “Insider information” to me means what tech vendors say in their press releases. It came from inside the company. So as I understand it, the justification for spinning off Metavante from M&I Bank was that both companies needed cash for acquisitions. I understand the bank’s need because there are lots of good banks just waiting to be swooped up by a better bank at three times book value. But I don’t understand where Metavante is going to do its shopping. A year ago, I took inventory of what was available and here’s the tally:
Theoretically there were 23 potential acquisitions for Metavante if it stayed within the boundaries of equivalent bank technology companies.
5 were candidates as long as they didn’t get too greedy.
7 were locked out because their owners were not impressed with BIG, culture differences, and just simply a fierce desire for independence.
8 just didn’t have any appeal for a company like Metavante that needs size and innovation as opposed to mom and pop shops with me-too products.
3 were buyers so they weren’t ready to give up the fight to be a major contender.

The churn rate was very low during this past year. CheckFree, Carreker, Corillian, Digital Insight and eFunds were on my list of 23 that got acquired. The remaining 18 are not my idea of major league companies that need big money to bring them on board. Metavante could cut their advertising budget and use the money to go shopping for any of the 7 real possibilities remaining on my list. They didn’t need OPM. So what does this tell us? My answer is, don’t expect any big announcements from cash-rich MV unless it shops for the bottom four of the now Big 8 (Open Solutions Inc., Harland Financial Solutions, Computer Services, Inc. or COCC), or goes far afield into new vertical industries. Do I hear a bid for TEMENOS?

There were only 12 acquisitions by the Big 8 in 2006. That’s the smallest number in the past ten years and the third smallest number in the past 22 years. Is the acquisitions game over? Is it the bottom of the 9th? Is Yogi yelling it ain’t over till it’s over? Beats me, I just compile the numbers.