Fidelity National Information Services Inc. (FIS) said Wednesday it will acquire Metavante Technologies Inc. (MV) in an all-stock deal valued at about $2.94 billion. The deal brings two of the largest core and transaction processing service providers together, and places roughly a 23 percent premium over Metavante's Tuesday closing stock price of $19.96. Metavante shareholders will receive 1.35 shares of Fidelity National stock for each share of Metavante they own. Fidelity National will issue about 162 million shares as part of the acquisition, the company said in a press statement announcing the merger. In 2008, the companies generated pro forma combined revenue of $5.2 billion, adjusted EBITDA of $1.3 billion and free cash flow of more than $500 million; Fidelity National said it expects to shave approximately $260 million in operating costs by combining the two entities. Metavante operates a mortgage lending solutions division that offers a well-known LOS (called Loan Origination Studio) that spans retail, wholesale, Internet direct, and correspondent origination channels; the lending platform now becomes part of FIS' expansive portfolio to technologies directed at the mortgage banking industry. The new executive team will integrate employees from both companies, Fidelity National said. Lee Kennedy, Fidelity National's current president and chief executive, will become executive vice chairman with the responsibility of overseeing the integration of Metavante. Metavante's current chairman and CEO, Frank Martire, will be named president and CEO of Fidelity National. Gary Norcross will continue to serve as chief operating officer after the deal closes, while Michael Hayford will become chief financial officer. Hayford is currently the president and COO at Metavante. Metavante's largest shareholder, an affiliate of private equity firm Warburg Pincus that owns 25 percent of Metavante's outstanding shares, has agreed to support the transaction, according to a report in the Business Journal of Milwaukee. Warburg Pincus is expected to own 11 percent of the combined company. Write to Paul Jackson at paul.jackson@housingwire.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.