The stock exchange operator has also announced its intention to combine its existing data and analytics subsidiaries Qontigo and ISS under one leadership and subsequently group them with SimCorp within a newly created investment management solutions segment
Deutsche Börse to take over SimCorp in an all-cash deal. (Credit: Dontworry/Wikipedia.org)
Deutsche Börse has agreed to make a Є3.9bn ($4.3bn) takeover offer to acquire SimCorp, a Denmark-based software and services provider to financial institutions.
As per the terms of the offer, the European stock exchange operator will pay DKK735 ($108.4) per share in cash to the shareholders of the publicly-listed investment management solutions provider.
Deutsche Börse said that the offer price represents a premium of 38.9% and a premium of 45.3% to the closing share price of DKK529 ($78) and three months volume-weighted average price of DKK505.7 ($74.6) as of 26 April 2023, respectively.
SimCorp is expected to complement Deutsche Börse’s existing data and analytics businesses and capabilities.
Besides, the acquisition is anticipated to enable the development of a full scope front-to-back investment management solutions segment.
With the transaction, SimCorp is aimed to become a major provider of investment management software-as-a-service (SaaS) and business-process-as-a-service (BPaaS) solutions.
SimCorp board of directors chair Peter Schütze said: “The Board of Directors finds that the offer from Deutsche Börse AG represents attractive value for the shareholders of SimCorp A/S as the company accelerates its transformation to a full -scale SaaS and BPaaS provider to deliver sustained long-term profitable growth.
“Deutsche Börse AG is well-positioned to contribute to the realisation of the long-term potential of SimCorp A/S, and the offer is a clear testament to the strong position and prospects of SimCorp A/S in a global investment industry undergoing fundamental changes and seeing rising demand for integrated technology platforms.”
The stock exchange operator has also announced its intention to combine the firm’s existing data and analytics subsidiaries Qontigo and ISS under one leadership. After the conclusion of the takeover, the combination of Qontigo/ISS will be grouped with SimCorp within a newly created investment management solutions segment.
Through the combination, Deutsche Börse seeks to expedite the development of its data and analytics segment, with General Atlantic becoming the only minority shareholder of the combined Qontigo entity.
Deutsche Börse CEO Theodor Weimer said: “Through our existing partnership we have come to know and appreciate the management of SimCorp A/S and the strategic transformation they have initiated, backed by a highly competent team of skilled employees.
“In addition to the SimCorp A/S transaction, we have decided to merge ISS and Qontigo. Both transactions will bring long-term growth, sizeable and tangible synergies, and a significant increase in our recurring revenues.”
The German-headquartered firm expects to fully finance the SimCorp offer with cash and debt.
Deutsche Börse has also entered into a fully underwritten bridge facility with Morgan Stanley, which is anticipated to be refinanced through existing cash and debt capital market instruments.
The transaction is anticipated to close in Q3 2023, subject to regulatory approvals and customary conditions, including a minimum acceptance level of 50% plus one share of all SimCorp’s shares.