DH Corp. (D+H) has entered into a definitive agreement to acquire Fundtech, a provider of global payments solutions to banks worldwide, for cash consideration of $1.25 billion. “The complexity of today’s global payments infrastructure, proliferation of channels, and an increasing desire for real-time payments is driving demand for payment solutions that allow banks to streamline payment processing while providing a more sophisticated and comprehensive view of liquidity management across various currencies and geographies,” said D+H chief executive officer Gerrard Schmid. “The acquisition of Fundtech puts D+H at the forefront of these trends globally, providing us with a market-leading software platform with established scale in mission-critical payment technology. It also delivers capabilities that are relevant to our existing customer base in Canada and the U.S. while making D+H more relevant to global financial institutions and large U.S. banks.”
Headquartered in New York City, Fundtech is a provider of financial technology to banks and corporations of all sizes in the Americas, EMEA, and APAC regions with approximately 1,500 employees and 19 offices worldwide, including development centers in the United States, India, Israel, Switzerland and the UK. Fundtech’s solutions are mission-critical to the day-to-day operations of banks and corporate clients. Fundtech offers a comprehensive line of transaction banking solutions including global and domestic payments solutions, financial messaging, corporate cash and liquidity management and merchant services. Fundtech has approximately 1,200 clients, including global money center banks, mid-sized banks and credit unions, non-bank financial institutions, central banks and corporates. Fundtech was founded in 1993 and acquired by Chicago-based private equity firm GTCR in 2011. Fundtech’s 2014 Adjusted revenue was $263 million ($291 million) and Adjusted EBITDA was $68 million ($75 million), representing growth of 9% and 15% over 2013, respectively.
D+H’s management believes that the estimated annual IT spend by banks for all of the markets in which Fundtech participates is approximately $5 to $6 billion. The market opportunity for global payments technologies is among the most attractive in the FinTech industry today. Market penetration of these solutions is still in the early stages which creates significant opportunities for companies like a combined Fundtech and D+H that have the scale, proven technology solutions, strong banking domain knowledge and trusted client relationships to compete in this market.
Closing of the Acquisition is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in the U.S. and other customary conditions and is expected to occur during the second quarter of fiscal 2015.