Swiss core banking vendor Temenos is working furiously to seal a merger deal with UK rival Misys as its latest set of results show a 33% drop in new license sales for the fourth quarter.
Reporting its fourth quarter and full year 2011 results, Temenos emphasised that discussions are ongoing with Misys, despite the interest shown by private equity suitor Vista Equity Partners in scuppering the deal.
Commenting on the results, Temenos CEO Guy Dubois says: "The sovereign debt crisis in Europe and its impact on funding markets put the banking sector back into a state of uncertainty. As a consequence, we saw decision cycles lengthen substantially with a corresponding impact on licence sales."
Fourth quarter license sales fell by nearly a third, while full year sales slipped by nine percent, despite the group signing 40 new banks, including two coveted tier one institutions.
The impact of the sovereign debt crisis severely impaired performance in the final quarter, with revenue down 15% and adjusted Ebit falling by 35% to $35m. Over the year, revenue was up by six percent, boosted by a strong rise in maintenance sales and services from the vendor's captive customer base.
The results keenly demonstrate Temenos' eagerness to seal the deal with Misys, effectively removing a potent competitor from the market and opening the opportunity for cross-sales.
Temenos says it is unable to give an outlook for 2012 as discussions with Misys continue. An announcement fleshing out the full terms of the proposed deal is expected within the next few days.