Deutsche Börse agrees €3.9bn offer for SimCorp in cash/debt financing deal

  • Deutsche Börse AG to launch an all-cash voluntary recommended public takeover offer for all shares (except treasury shares) in SimCorp A/S for DKK 735.0 ($108.7) per share in an all debt-financed transaction, valuing SimCorp A/S at €3.9 billion ($4.3bn)
  • The offer price represents a 38.9% premium and a 45.3% premium over the closing price of DKK 529.0 and the 3-months volume-weighted average price of DKK 505.7 as of 26 April 2023, respectively
  • The Board of Directors of SimCorp A/S has unanimously decided that it intends to recommend the shareholders of SimCorp A/S to accept the offer when it is published
  • The transaction is expected to be mid-single digit cash earnings per share accretive in the first year after completion based on the expected annual run rate synergies
  • In parallel to the takeover of SimCorp A/S, Deutsche Börse AG intends to combine its existing data & analytics subsidiaries Qontigo and ISS under one leadership. Upon completion of the offer, the combination of Qontigo/ISS and SimCorp A/S will be grouped within a newly created Investment Management Solutions segment to drive further growth, efficiencies, and full value crystallization. This includes the option of a potential IPO for the combined ISS/Qontigo business in the medium term
  • Within 3 years of completion of the offer, Deutsche Börse AG expects total annual run rate EBITDA synergies of around €90 million, of which around €55 million are cost synergies and around €35 million are revenue synergies, with a one-off cost to achieve these synergies of around €100 million

Deutsche Börse AG and SimCorp A/S have today entered into a binding agreement, pursuant to which Deutsche Börse AG will make an all cash voluntary recommended public takeover offer to acquire all of the shares (except treasury shares) in SimCorp A/S at a price of DKK 735.0 per share, adjusted for any dividends or other distributions paid by SimCorp A/S prior to completion of the offer, valuing the entire issued capital of SimCorp A/S at €3.9 billion. Deutsche Börse AG will fully finance the SimCorp A/S offer with cash and debt.

SimCorp A/S, a renowned provider of investment management software and associated technology-enabled services, will seamlessly complement Deutsche Börse AG’s existing data and analytics businesses and capabilities and allow the creation of a full scope front-to-back Investment Management Solutions segment. Benefitting from compelling strategic rationale and high complementarity, the combined business will sit at the heart of the investment management ecosystem as a leading provider of solutions across data, index, and analytics, and offer software solutions fully embedded in customer workflows.

The transaction will significantly expand Deutsche Börse AG’s total addressable market and builds on the already successful cooperation initiated in 2021 between SimCorp A/S and Qontigo, a subsidiary of Deutsche Börse AG.

Deutsche Börse AG firmly believes that SimCorp A/S will significantly benefit from becoming an integral part of Deutsche Börse AG’s group of companies. As a provider of investment management SaaS (Software-as-a-Service) and BPaaS (Business-Process-as-a-Service) solutions at scale, SimCorp A/S will continue to be well positioned as an independent leading front-to-back investment management solutions platform. By joining forces, Deutsche Börse AG and SimCorp A/S will be able to create significant value for clients, employees and all other stakeholders involved.

The combination will strengthen the ability of SimCorp A/S to transform its business model and further invest in innovation to become a leading SaaS and BPaaS player for global asset owners, asset managers, and asset servicers, operating as an open platform that delivers both flexibility and operational efficiency under the strong brand name of SimCorp A/S. Deutsche Börse AG views the management and employees of SimCorp A/S as a key cornerstone for SimCorp A/S’s future success and intends to preserve SimCorp A/S’s current global operational presence, including maintaining the headquarters of the SimCorp Group as well as the registered office in Denmark.

In parallel, Deutsche Börse AG aims to accelerate the development of its Data & Analytics segment to drive additional growth and efficiencies. Jointly with General Atlantic it intends to combine Qontigo and ISS, with General Atlantic becoming the sole minority shareholder of the combined Qontigo entity. Deutsche Börse AG and General Atlantic have jointly reached an understanding in principle on the intended combination aiming to form a leading combined ESG, data, index, and analytics provider. This will allow them to explore value creating capital markets options including a potential IPO in the medium term.

Together with SimCorp A/S, the intended Qontigo/ISS combination will transform Deutsche Börse AG’s Data & Analytics segment into an Investment Management Solutions segment.

Theodor Weimer, CEO of Deutsche Börse AG, said in a statement: “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 A/S is a perfect fit strategically and culturally.”

Peter Schütze, chair of the Board of Directors of SimCorp A/S, said in a statement: “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 realization 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.”

It has entered into a fully underwritten bridge facility with Morgan Stanley, which is expected to be refinanced by an optimal mix of existing cash and debt capital market instruments. The envisaged funding of the proposed transactions is expected to result in an AA- rating at Group-level and maintaining AA at Clearstream-level. Deutsche Börse AG is committed to preserving a strong investment grade rating both at Group-level and Clearstream-level following the completion of the transactions.

Read the full release

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