Temenos has agreed a £1.4 billion deal for British company Fidessa.
The Swiss software company hammered out the deal a day after the companies announced that advanced takeover talks were being conducted. Temenos are keen on the deal in order to add Fidessa’s equities trading technology to expand Temenos’s customer base in the financial services industry.
Fidessa shareholders will get £35.67 for each share in an all-cash deal, when it is completed (most likely in the first half of 2018). The British company’s investors will also get a final dividend and a special dividend of 79.7 pence for 2017.
Temenos said that it is borrowing up to 1.43 billion pounds, making it its biggest ever acquisition to date. While the company declined to comment on the size of capital raising, it said it would later raise cash on the capital markets to reduce its debt.
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”, Temenos Chairman Andreas Andreades said in a statement.
Andreades said software in the capital markets industry was highly fragmented and dominated by older systems, creating an opportunity for the combined company’s offering. Financial institutions spent an estimated $14 billion on capital markets software in 2018, with $3 billion going to third party vendors like Temenos. Such total spend is expected to grow by 8 per cent per year, the company said.