Swiss banking software company Temenos has agreed to acquire Kony, a US digital banking software as a service (SaaS) company, in a deal worth up to $580m (£475.94m).
The total consideration of the deal includes an enterprise value of $559m (£458.71m) and an earn-out of $21m (£17.23m).
Kony’s product — Kony Digital Banking Experience (Kony DBX) is claimed to be used by some of the top-tier and mid-market banks in the US and across the world.
Through its digital banking applications and its development platform, the company helps banks the experience for their clients. All the applications and the platform are provided by the company through a cloud-hosted SaaS model.
Comprising a suite of mobile banking apps, the Kony DBX product is said to improve omnichannel experiences. Among these are support for conversational interfaces, augmented reality, artificial intelligence, and wearable technologies.
Kony’s development platform is claimed to speed up product cycles, while increasing agility by decreasing the load on bank IT to design and repeat user experiences.
The company’s total revenue is anticipated to be around $115m (£94.37m) in 2020, of which more than 60% is recurring with the majority being SaaS. The digital banking SaaS company has a workforce of more than 1,500 people.
Kony chairman and CEO Thomas Hogan said: “The power of the Temenos portfolio, combined with Kony’s digital banking applications and multi-experience development platform, will bring the industry’s most robust suite of applications for delivering service, value, and efficiencies from the digital edge to the modern core.”
What Temenos expects from Kony acquisition
According to Temenos, the acquisition of the digital banking SaaS company will boost its scale and capabilities in the US to a great extent. It will also significantly add digital expertise to the Swiss firm and accelerate Temenos Infinity, its digital front office product used by more than 500 banking clients.
Temenos CEO Max Chuard said: “We are acquiring a digital front office product that has already been successful in the US market and is connected to most third party cores.
“We are also adding a significant amount of exciting functionality and ease of generating customer journeys and experiences that will accelerate Temenos Infinity, providing banks in both North America and internationally with an unrivalled customer experience and omnichannel banking product.”
Subject to receipt of customary regulatory approvals, the transaction is expected to be closed by early Q4 2019.
In late 2018, Temenos acquired Avoka, a US-based provider of digital banking transformation solutions, for $245m (£201.04m).
