D+H ponders sale

D+H ponders sale

DH Corporation (D+H) has set up a committee to review its possible sale, it is understood.

As reported earlier this month by National Post, the Canadian company brought together a group of independent directors to review expressions of interest from third parties to acquire the banking tech vendor.

No formal offer has been received, however, and there are no guarantees that any transaction will result from the committee’s work, Banking Technology understands.

It is believed Fiserv was among those potentially interested, but passed on the opportunity. D+H and Fiserv are direct competitors (with Fiserv being the larger of the two).

Credit Suisse and RBC Capital Markets were recruited as financial advisors and Stikeman Elliott LLP as a legal advisor.

D+H’s stock currently trades at 10x Fy17 PE, which is very cheap compared to the company’s US peers and has seen consensus earnings come down a lot in the last few months.

D+H’s core business used to be cheque printing for Canadian banks, but with the decline of cheques the company tried to diversify – largely via M&A.

In 2013, it purchased a US-based provider of core banking and lending software, Harland Financial Solutions, for $1.2 billion in cash.

Harland’s flagship core offering, PhoenixEFE, is well established among small and mid-tier banks and credit unions in the US.

In 2015, it acquired payments software provider Fundtech for $1.25 billion. The Fundtech brand was subsequently replaced with Global Transaction Banking Solution (GTBS).

GTBS competes for large-scale payment projects around the world with its flagship GPP platform. Its users include Swedbank, HSBC, Bank of China, Citi and Barclays. It has, however, recently lost Allied Irish Banks (AIB) to rival payments provider Dovetail.

GTBS also has a cash management system, CashPlus, used by the likes of Ecobank, Standard Bank, Intesa Sanpaolo and ANZ.

  • Stanley Longfellow 23 December, 2016 at 1656

    Very interesting. If an acquisition occurs, the community bank core space will be even tighter.

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