DH Corporation (D+H), Canadian financial technology company, has reached an agreement to acquire Fundtech, a US-based global payment services provider, for $1.25bn in cash from a private equity firm GTCR.
Subject to regulatory approvals and other customary conditions, the deal is scheduled to conclude in the second quarter of this year.
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The transaction is expected to expand D+H’s US customer base as well as enhance growth opportunities in North America, EMEA and APAC regions. It is also expected to strengthen the company’s position as a key global financial technology provider with a strategic expansion into global payments.
D+H said the combination would result in pro forma 2014 adjusted revenues of about $1.45bn and adjusted net income of $216m, as well as attractive medium-term synergies and cost savings.
Additionally, D+H signed an agreement with a syndicate of underwriters, pursuant to which they have agreed to buy from D+H and sell to the public 16.5 million subscription receipts at a price of $37.95 per receipt, for gross proceeds to D+H of $626.18m, and $200m of 5% extendible convertible unsecured subordinated debentures.
The net proceeds of the offering will be used to fund a part of the Fundtech deal, the company said.
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By GlobalDataD+H CEO Gerrard Schmid said: "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 US while making D+H more relevant to global financial institutions and large US banks."
