Deutsche Börse has made a €3.9 billion bid to takeover Danish financial sodtware house SimCorp.
The offer price represents a 38.9% premium and a 45.3% premium to the closing share price and 3-months volume-weighted average price of SimCorp.
The transaction, which has been recommended by SimCorp's board, forms part of a plan by the German exchange to grow its data & analytics business. Upon completion, the combination of DB subsidiary Qontigo/ISS and SimCorp will be grouped within a newly created Investment Management Solutions segment, with the option of a potential IPO for the combined ISS/Qontigo business in the medium term.
The cooperation and partnerships within the unit are expected to deliver significant upselling and cross-selling opportunities, a strengthening of the ESG offering as well as rationalisation of certain corporate functions with total estimated run-rate Ebitda level synergies of around €90 million per year within three years, and one-off costs of around €100 million.
SimCorp, which has more than 2,200 employees, posted operating profit of €126 million on revenue of €561 million last year.
The German exchange intends to preserve SimCorp's current global operational presence, including maintaining the headquarters and registered office in Denmark.
Theodor Weimer, CEO of Deutsche Börse AG, said: “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.
"In addition to the SimCorp A/S transaction, we have decided to merge ISS and Qontigo. Both transactions will bring long-term growth, sizeable and tangible synergies, and a significant increase of our recurring revenues. We would be delighted to welcome SimCorp, which has been a trusted business partner for many years, to Deutsche Börse Group and to embark on this exciting journey together.”