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Press release from CNW Group

Davis + Henderson Completes Acquisition of Harland Financial Solutions

Friday, August 16, 2013

Davis + Henderson Completes Acquisition of Harland Financial Solutions

09:08 EDT Friday, August 16, 2013

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

TORONTO, Aug. 16, 2013 /CNW/ - Davis + Henderson Corporation ("D+H" or the "Corporation") (TSX: DH, DH.DB) today announced it has successfully completed the US$1.2 billion acquisition (the "Acquisition") of Harland Financial Solutions ("HFS"), a leading U.S.-based provider of strategic technology, including lending and compliance, core banking, and channel management technology solutions.

With the Acquisition, D+H improves its competitive position by expanding its value-added suite of financial technology ("FinTech") products for banks and credit unions and accelerates its strategy of being a leading North American FinTech provider. The complementary nature of D+H's combined offering is expected to fuel product cross-selling synergies and new revenue opportunities by providing existing and new clients with a more powerful solutions set that they can use to grow, compete, meet compliance requirements and drive operational effectiveness. Inclusive of HFS, D+H now serves approximately 6,200 customers in North America and achieves greater revenue diversification by geography and service line.

The all-cash transaction was funded by way of a bought deal prospectus offering of subscription receipts ("Subscription Receipts") and 6.00% extendible convertible unsecured subordinated debentures ("Debentures") for gross proceeds of $690.2 million and from borrowings under a new committed credit facility. The stock purchase agreement pertaining to the Acquisition was signed and announced on July 23, 2013 and was subject to customary closing conditions, including approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in the United States.

"The enthusiastic support received in the capital markets and in our client markets since we announced the transaction is much appreciated and reflects the clear value creation potential of this transformational acquisition," said Gerrard Schmid, CEO of D+H. "We look forward to using our complementary technologies and expanded capabilities to meet the broader needs of our combined client base of 6,200 and to forge an even stronger value proposition for the future as we concentrate on growing our presence among the 13,000 banks and credit unions who form our available market."

For more information on this transaction, please visit www.NewFinTechFuture.com.

Extension of Debentures and Exchange of Subscription Receipts

With the completion of the Acquisition today, (i) the maturity date for the Debentures has been automatically extended to September 30, 2018 and (ii) each Subscription Receipt was automatically exchanged into one (1) common share of the Corporation through the non-certificated inventory system of CDS Clearing and Depositary Services Inc. D+H expects that the Subscription Receipts will be immediately halted from the Toronto Stock Exchange and de-listed after markets close today.Further details concerning the Debentures and the Subscription Receipts are set out in D+H's short form prospectus dated August 1, 2013, available on SEDAR at www.sedar.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States or any jurisdiction in which such offer, solicitation or sale would be unlawful. Any securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registrations requirements of such Act and applicable state securities laws.

ABOUT D+H

D+H is a leading provider of secure and reliable technology solutions to North American financial institutions with a reputation for being a trusted partner that helps clients build deeper, more profitable relationships with their customers based on rich industry and market insight, and consumer knowledge. Banks and credit unions across North America rely on D+H to deliver solutions across three broad service areas: Banking and Lending Technology, Lending Processing Solutions, and Payments Solutions. Our integrated, compliant technology solutions enable clients to grow, compete, and optimize their operations, while our forward looking approach helps them stay ahead of the market and anticipate changing consumer needs.

The acquisition of HFS, and its complementary product suite, will enhance D+H's position as a North American FinTech provider, increase our current client base to approximately 6,200 banks and credit unions, expand our capabilities as a leader in lending and compliance solutions, core banking technology solutions and channel solutions, create significant cross-selling and revenue synergies, improve diversification and provide further support for our growth strategies.

In 2012, D+H rose to 35th on the FinTech 100, a ranking of the top technology providers to the global financial services industry, and is ranked 24th on the 2013 Branham 300, a listing of the top Canadian ICT companies.

Davis + Henderson Corporation is listed on the Toronto Stock Exchange under the symbol DH. Further information can be found at www.dhltd.com and in the disclosure documents filed by Davis + Henderson Corporation with the securities regulatory authorities at www.sedar.com.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements contained in this new release that are not current or historic factual statements constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Statements concerning D+H's objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition of the Corporation are forward-looking statements. The words "believe", "expect", "anticipate", "estimate", "intend", "may", "will", "would" and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to important assumptions, including the following specific assumptions: general industry and economic conditions; changes in D+H's relationship with its customers and suppliers; pricing pressures and other competitive factors; the anticipated effect of the Acquisition on the financial performance of the Corporation; and the ability of D+H to achieve the expected benefits of the Acquisition, including (i) D+H's ability to enhance its presence in the U.S. FinTech market, (ii) the diversification of D+H's business in terms of service offerings, clients and geographic focus as a result of the Acquisition, (iii) the broadening of D+H's sources of long-term recurring revenues following the date hereof, (iv) D+H's ability to successfully integrate the HFS business with D+H's existing business, and (v) D+H's expectation that the complementary nature of D+H's combined offering will result in cross-selling synergies and new revenue opportunities.

The Corporation has also made certain macroeconomic and general industry assumptions in the preparation of such forward-looking statements. While the Corporation considers these factors and assumptions to be reasonable based on information currently available, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of D+H's business, HFS's business or developments in the Corporation's industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Risks related to forward-looking statements include, among other things, challenges relating to the integration of HFS' business with D+H's existing business; the possibility that D+H may not generate sufficient cash flow following the Acquisition to maintain its current dividend level and also reduce debt; challenges presented by declines in the use of personal and business cheques; D+H's dependence on a limited number of large financial institution customers and dependence on their acceptance of new programs; strategic initiatives being undertaken to meet D+H's financial objective; stability and growth in the real estate, mortgage and lending markets; increased pricing pressures and increased competition which could lead to loss of contracts or reduced margins; challenges arising from changes in laws and regulations in Canada and the United States; as well as general market conditions, including economic and interest rate dynamics.

Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and the Corporation does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change except as required by applicable securities laws.

All of the forward-looking statements made in this news release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Corporation.

SOURCE: Davis + Henderson Corporation

For further information:

Investors: 

Brian Kyle, Executive Vice President and Chief Financial Officer, Davis + Henderson Corporation, (416) 696-7700, investorrelations@dhltd.com or visit our website at www.dhltd.com.

Media:

Tannis Baldock, Hill+Knowlton Strategies, tannis.baldock@hkstrategies.ca

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