FDC announces sale of health systems group.

HACKENSACK, N.J.--(BUSINESS WIRE)--May 16, 1995--First Data Corp. (NYSE:FDC) today announced it has signed a definitive agreement to sell its health systems unit to HBO & Company (NASDAQ:HBOC) in exchange for approximately 4 million shares of HBOC common stock. FDC also will have a seat on HBOC's board of directors.

The transaction is subject to Hart-Scott-Rodino approval. The companies said that they would seek an expedited approval, and anticipate closing the transaction in early June.

First Data's Charlotte-based Health Systems Group (HSG) provides software and computer based solutions to more than 500 health care providers, primarily hospitals and other large health organizations. FDC said it was selling HSG to HBOC as part of its previously announced strategy to concentrate its operating businesses in the financial services market sectors.

"We are executing our stated strategy of concentrating our businesses in the financial services sector," said FDC chairman and chief executive officer Ric Duques. "The sale positions HSG with a strong and growing company concentrated on the health services sector. By taking shares in HBOC, First Data will be able to benefit from the synergies created in this combination."

Including the effects of this sale, FDC continues to expect revenue and net income to grow in excess of its long-term objective of 20 percent. After accounting for newly-issued shares resulting from acquisitions, earnings per share for 1995 is expected to grow near the company's objective of 20 percent.

Duques added, "We believe that healthcare information services continues to offer significant growth potential. HBOC, as the leader in the industry, is particularly well positioned to capitalize on the customer base and other strengths brought by HSG. We intend to hold our position in HBOC until the benefits of this combination are realized. As a major shareholder with participation on the board, at such time as we may liquidate our position, we expect to do so in an orderly manner."

FDC is a provider of high-quality, high-volume information processing and related services to the transaction card, payment instruments, mutual fund, teleservices, receivables and information management industries.

HBO & Co. delivers enterprise patient care, clinical, financial and strategic management solutions, as well as networking technologies, outsourcing and other services to healthcare organizations in the United States, United Kingdom, Canada, Australia and New Zealand.

CONTACT: David P. Walker, 201/525-4709