The recent rating downgrade of Jacksonville, Fla.-based Fidelity National Information Services Inc. (FIS) reflects the company's more aggressive financial profile following the acquisition of unrated eFunds. Pro forma debt to EBITDA will rise to the mid-3x area from the current level of less than 3x. Rating support is provided by a stable recurring revenue base, good cash flow generation, and the opportunity to realize both product and cost synergies over time. The acquisition of eFunds gives FIS greater scale, extends its presence in the U.S. and international banking markets, and expands the distribution channel for its core processing and risk analytic services. In addition, FIS expects to realize significant cost savings of approximately $65 million per year. The prior combination
