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CheckFree Buys Aphelion

ATLANTA — CheckFree Corp.'s October purchase of Aphelion Inc. teams a major player in the financial electronic commerce services market with a major player in the fitness software provider market. CheckFree, which serves several industries, already claimed as its fitness customers some of the larger health club groups and chains, but the purchase of Aphelion adds to the company the large base of midsized and independent clubs that make up Aphelion customers, the company said. Aphelion also establishes CheckFree's health and fitness presence internationally in Europe, Canada and Asia-Pacific.

CheckFree acquired Aphelion for $18 million in a cash transaction that closed on Oct. 31, 2005.

“We had little overlap, which makes for a good fit,” said Matt McKernan, senior vice president of CheckFree's electronic commerce division. CheckFree did not offer outsourced billing or Web-based services, which Aphelion offers.

Aphelion, on the other hand, was missing the financial transaction piece, something that Bill Nichtberger, co-founder and vice president of Aphelion, said CheckFree provided. “We've now put together the three elements that club owners need,” he said.

Aphelion and Checkfree are bringing diverse strengths and capabilities to the alliance, said Ron Poliseno, director of client development for the health and fitness division of CheckFree.

“Two companies in different segments of the market have come together to meet the needs of the entire industry,” he said.

McKernan said that club owners could take comfort in knowing that as a combined entity, the company would be the best in breed.

“At some point, we will come up with one product that will be the best in the industry,” he said.

CheckFree's earnings expectations for the quarter ending Dec. 31, 2005, and the fiscal year 2006 ending June 30, 2006, remain unchanged. The acquisition of Aphelion is expected to contribute about $1 million in revenue for the second quarter of the fiscal year. The company now expects second quarter revenue in the range of $211 million to $216 million. For the quarter ending Dec. 31, 2005, the company continues to expect GAAP earnings per share in the range of $0.33 to $0.36 and underlying earnings per share in the range of $0.40 to $0.42. For fiscal 2006, GAAP earnings per share expectations remain in the range of $1.08 to $1.13, with underlying expectations for earnings per share in the range of $1.50 to $1.54.

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