Germany-based stock exchange operator Deutsche Börse has agreed to acquire Danish financial software provider SimCorp to expand its data and analytics business.
Under the terms of the agreement, Deutsche Börse will acquire all the shares of SimCorp at a price of DKK735 ($108) per share, which values the Danish company at €3.9bn.
SimCorp’s Board of Directors unanimously recommended the shareholders to accept the offer.
The transaction is expected to be completed in the third quarter of this year, subject to certain customary closing conditions and regulatory approvals, among others.
Upon closing, SimCorp will become an integral part of Deutsche Börse’s group of companies.
Deutsche Börse intends to continue SimCorp’s current global operational presence, including its existing headquarters, along with the registered office in Denmark.
Deutsche Börse CEO Theodor Weimer said: “Over the last couple of years we have significantly enhanced our data and analytics capabilities with a strong strategic focus to further develop within the investment management business.
“SimCorp is a perfect fit strategically and culturally. It is one of the leading global investment management software providers, serving the largest asset managers and asset owners worldwide.
“Through our existing partnership, we have come to know and appreciate the management of SimCorp and the strategic transformation they have initiated, backed by a highly competent team of skilled employees.”
Deutsche Börse said that the acquisition will complement its existing data and analytics capabilities and creates a large-scale Investment Management Solutions business.
The combined company will operate as a top provider of data, index, and analytics solutions, and offer software solutions fully embedded in customer workflows.
In addition, the transaction will significantly expand its total addressable market and strengthens the existing partnership with SimCorp, initiated in 2021, said Deutsche Börse.
Deutsche Börse intends to fund the transaction with cash and debt and is procuring a fully underwritten bridge facility with Morgan Stanley.
The company intends to refinance the bridge facility through a combination of existing cash and debt capital market instruments.
SimCorp Board of Directors chairman Peter Schütze said: “The Board of Directors finds that the offer from Deutsche Börse represents attractive value for the shareholders of SimCorp 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, and the offer is a clear testament to the strong position and prospects of SimCorp in a global investment industry undergoing fundamental changes and seeing rising demand for integrated technology platforms.”
Simultaneously, Deutsche Börse is set to combine Qontigo and ISS, with US-based private equity firm General Atlantic becoming the sole minority shareholder of the combined entity.
Deutsche Börse and General Atlantic have reached a joint reached an understanding in principle, to form a combined ESG, data, index, and analytics provider.
SimCorp, together with the planned Qontigo-ISS combination, would transform Deutsche Börse’s Data and Analytics business unit into an Investment Management Solutions segment.
Weimer added: “In addition to the SimCorp 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.
“We would be delighted to welcome SimCorp, which has been a trusted business partner for many years, to Deutsche Börse Group and to embark on this exciting journey together.”
