is set to end 2016 with annual runrate synergies of $150million from the SunGard acquisition, according to President and CEO GaryNorcross.
Theincrease in the 2016 runrate synergy target will come from both revenue andselling general and administrative synergies, the CEO said during a May 3earnings call.
"Whatwe have realized as we have gone through this process is that there are someopportunities within the former SunGard business to implement changes in theway FIS operates these businesses," Norcross said. "We've seen acombination of accelerated pull through that was identified in due diligence.We've also seen some opportunities that are new that we didn't discover duringdue diligence."
The$150 million figure is higher than the previously expected $100 million insynergies from the deal, CFO Woody Woodall noted.
"Weexpect the earnings impact of this increase in runrate synergies to be moreheavily weighted in the second half of the year and drive benefit in the2017," the CFO said.
Norcrosssaid the SunGard deal has allowed Fidelity National Information Services toexpand into new and adjacent markets and grow its offerings. The CEO touted thepositive impact of the new portfolio offering from SunGard deal on thecompany's global financial solutions business, which delivered topline organicgrowth of greater than 4% during the first quarter.
Hesaid approximately 85% of the total revenue of Fidelity National InformationServices' global financial solutions business now comes from intellectualproperty-led solutions as a result of the SunGard acquisition. He also notedthat the business now has more diversified pipeline partly due to the additionof new offerings from SunGard. While the change in the mix will limit growth ofthe business, the CEO reassured that it will result in higher profit marginsand more predictable revenue.
Despitethe higher expected runrate synergies for 2016 and the positive impact of theintegration on the global financial solutions business, Fidelity NationalInformation Services did not change its earnings outlook for the year.
Thecompany continues to expect organic revenue growth of between 3% and 4% andadjusted EPS from continuing operations of $3.70 to $3.80 in 2016, according toits earnings release.
"It'sa very good start of the year. One quarter does not make a year. We're justbeing conservative," Woodall said in response to a question about thecompany's decision to not change its guidance.