On the day it reported a fall in fourth quarter revenues, Swiss core banking vendor Temenos has acquired US financial software provider Akcelerant for $50 million in cash.
The acquisition will also include another $5 million subject to an earn-out over the next three years. The impact of the acquisition is expected to be non-IFRS EPS neutral in 2015 and two per cent accretive from 2016 onwards.
Founded in 2000, Philadelphia-based Akcelerant provides a range of software to some 600 financial services institutions in North America, predominantly credit unions. The firm expects to generate revenues of around $15 million and break even this year, reaching group margins by the end of 2017.
Temenos has been setting its sights on the North American market recently, buying Trinovus, a software-as-a-service technology provider, in 2013 and creating a USA division, which Akcelerant founder Jay Mossman and his executive team will join.
David Arnott, CEO, Temenos, says: "Putting the Akcelerant products together with Temenos’, including a new US model bank for T24, will give us an enhanced value proposition for the US financial services market, which we believe needs real-time, flexible and omni-channel solutions to be able to succeed against tougher competition and more demanding customer expectations."
Meanwhile, Temenos posted Q4 revenues of $133.1 million, down five per cent on a like for like basis on the same period in 2013. While maintenance revenues were up, software licensing income dropped eight per cent, to $50.4 million, on a like for like basis. However, non-IFRS Ebit was up 13% to $60.3 million and earnings per share rose 17% to 74 cents.
Says Arnott: "Despite disappointing software licensing revenue in Q4 which impacted full year growth, we have made good progress on our strategic initiatives with the signing of Julius Baer at the start of this year validating our belief in our products and on our ability to execute on key deals. We have taken the necessary actions to address the issues faced at the end of last year and expect strong growth in 2015."