Both companies provide customer strategy and decision management applications and tools. Fair, Isaac provides analytic solutions, and HNC is a recognized name in high-end analytic and decision management software, which can be used to combat insurance fraud.

"They help companies acquire customers, build customer loyalty, reduce losses and optimize the value of customer relationships," said Fair, Isaac.

The addition of HNC's domain and technology expertise will allow the combined company to offer a more complete set of solutions to core markets, including financial services, retail, telecommunications, insurance, government and health care, the company noted.

"We have an exciting opportunity to bring together the best minds in analytics and decision management to better leverage and deliver leading-edge technologies, products and services," said Tom Grudnowski, CEO of Fair, Isaac.

Under the agreement approved by both company boards, the owners of HNC will receive 0.346 of a newly issued Fair, Isaac share for each share of HNC, the company explained.

HNC stockholders will own approximately 35 percent of the total outstanding capital stock of the merged company. Two directors from HNC will join the Fair, Isaac board, bringing the total membership to nine.

Mr. Grudnowski will remain as CEO of Fair, Isaac. According to the company, the overall transaction is valued at approximately $810 million, based on the closing price of Fair, Isaac stock on April 26, 2002.

The transaction is expected to be tax-free to stockholders of both companies for U.S. federal income tax purposes and is expected to close in the third calendar quarter, subject to regulatory review, approval by both companies' stockholders, and "certain other conditions," the company noted.

Fair, Isaac is a provider of predictive modeling, decision analysis, intelligence management and decision engine systems that power more than 14 billion decisions a year, the company said.

HNC's high-end analytic and decision management software enables global companies to manage customer interactions by converting data and customer transactions into real-time recommendations, said Fair, Isaac.

HNC's software helps companies in the financial services, insurance, telecommunications and healthcare industries, and government agencies to make mission-critical customer decisions designed to increase revenues and decrease risk.