Temenos agrees to 1.4 billion pounds deal for Fidessa
Staff Writer |
The boards of Temenos and Fidessa have reached an agreement on the terms of a recommended all cash acquisition by Temenos, through its wholly-owned subsidiary, Temenos Holdings UK Limited (Temenos Bidco), of the entire issued and to be issued ordinary share capital of Fidessa.
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Fidessa and Temenos are two leading providers of software to banks and financial institutions, and the transaction represents a compelling opportunity to create a global leader in financial services software.
The combination of Temenos and Fidessa (the Enlarged Group) creates a group with the reach, stability and complementarity, across both product and geographies, to deliver greater value to its clients across their whole businesses.
Fidessa shareholders will be entitled to receive £35.67 in cash for each Fidessa share.
In addition, Fidessa shareholders on the register of members of Fidessa as at close of business on May 11, 2018 or at close of business on the business day prior to the effective date of the transaction (if earlier), will be entitled to receive and retain a final dividend and a special dividend in respect of the year ended December 31, 2017 together amounting to 79.7 pence in aggregate per Fidessa share.
The price of £35.67 in cash for each Fidessa share represents a premium of approximately 36.9% to the closing price of £26.05 per Fidessa share on February 16, 2018.
The transaction will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the UK Companies Act 2006.
The transaction is subject to the satisfaction or waiver of certain conditions including the approval by Fidessa shareholders and the Court, receipt of certain anti-trust and regulatory clearances and other customary conditions. It is expected to complete in the first half of 2018.
The 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%
- a diversified revenue base with approximately 42% of sales for the year ended 31 December 2017 in Europe, 29% in the Americas, 20% in Asia Pacific and 9% in the Middle East & Africa
The transaction is expected to yield significant benefits through efficiencies and cross-selling opportunities.
The Temenos board 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. ■