Temenos buys trading platform provider Fidessa for £1.4bn
On 20 February there was a “possible offer” being discussed. Today (21 February), Temenos says the boards of Temenos and Fidessa have reached an agreement on the terms of a recommended all cash acquisition.
Fidessa shareholders will be entitled to receive £35.67 in cash for each Fidessa share.
Temenos says its enlarged group is expected to have (on a pro forma basis), for the year ended 31 December 2017, revenues in excess of $1.2 billion and an EBITDA margin of 32.3%.
The Temenos board says it expects the transaction to generate approximately $60 million per annum of run-rate pre-tax cost synergies, which are expected to be fully achieved within three years post completion. The EBITDA margin for the enlarged group is expected to increase from 32% to 37% pro forma for the run-rate cost synergies.
Andreas Andreades, the executive chairman of Temenos, says the deal will “accelerate both companies complementary growth strategies in banking and capital markets and will enable us to cross-sell into our existing client bases and capture a greater share of the IT and software spend of banks especially as they move to the cloud”.
Andreades adds: “The capital markets industry is undergoing structural changes that will require it to renew its software systems. However, the current vendor landscape is fragmented and dominated by legacy technology. This creates a huge opportunity to combine the complementary product strengths of Fidessa and Temenos in the front and back office.”
On 19 February, Fidessa released its financial results for the year ended 31 December 2017 – and its revenues rose by 7% to £353.9 million.
As reported on 15 February, Temenos also had some good financial results. It enjoyed a decent 2017 with a total software licensing growth of 22%, retaining the momentum gained in 2016.
If you had forgotten, back in 2016 it revealed a total software licensing growth of 21% and earnings growth of 20%.
In its latest flurry of stats, Temenos says tier 1 and 2 banks contributed 59% of its total software licensing in FY 2017, and it had 65 new customer wins.
And if you had forgotten another matter, as reported last month, SoftBank was rumoured to be acquiring Temenos, but this was denied.
This story was previously published on 20 February 2018 with the headline “Temenos mulls £1.4bn Fidessa acquisition”. It has been updated to reflect that the acquisition has been confirmed.