Vista Equity Partners agreed to acquire Toronto-based global FinTech leader DH Corp (TSX: DH) known as D+H, for $25.50 per share in cash including the assumption of debt, for an enterprise value of $4.8 billion.
Vista intends to combine D+H with its UK-based portfolio company Misys, a leading global software provider for retail and corporate banking, lending, treasury and capital markets, investment management and enterprise risk.
The combination will create a diversified FinTech market leader, with a global footprint and one of the broadest set of financial software solutions available to the market with approximately $2.96 billion (approximately US$2.2 billion) in revenues, approximately 10,000 employees, and 9,000+ customers across 130 countries, including 48 of the top 50 Banks.
With annual revenues in excess of $1.6 billion CAD, and more than 5,500 employees worldwide, D+H is recognized as one of the world’s top FinTech companies.
The purchase price represents a premium of 36% over D+H’s closing share price on December 5, 2016, the last trading day before media reports surfaced suggesting the company was exploring strategic alternatives.
Private equity firm Vista has offices in Austin, San Francisco, Oakland, and Chicago with more than $28 billion in cumulative capital commitments. The firm focuses on investments in software and technology-based companies.
“We are thrilled by the prospect of combining these two leaders in the FinTech industry,” said Brian N. Sheth, Co-Founder and President of Vista Equity Partners. “D+H is an outstanding company with impressive talent and deep experience providing technology solutions to financial institutions worldwide. Over the last five years we have worked closely with the Misys management team to transform and grow its global business and this is a great next step in that process.”
“We are pleased that this transaction appropriately recognizes the value of D+H’s market-leading suite of mission-critical FinTech solutions, which are trusted by thousands of financial institutions, governments and corporations,” said Paul Damp, Chairman of the Board of D+H.
“The combination of D+H and Misys creates a global leader in financial technology, with a broad array of products to serve customers,” said Gerrard Schmid, Chief Executive Officer of D+H. “D+H brings depth in North America and leadership in payments and lending; while Misys has a strong market position in Europe, the Middle East, Africa, and Asia; and leadership capabilities in banking, capital markets, investment management and risk solutions.”
“The combination of our two companies creates significant opportunity for our customers, our employees and our partners,” said Nadeem Syed, CEO of Misys. “By coming together, we have the opportunity to create a global FinTech leader, positioning us to lead the corporate banking software space, accelerate our cloud-based offerings, and expand our footprint in North America.”
Misys and D+H are highly complementary in terms of both software solutions and geographical footprint. With D+H’s strength in Payments, Lending, and Retail Banking solutions in North America combined with Misys’s strength in Capital Markets, Corporate Banking, and Retail Banking globally, the combined business will serve customers all over the world with an unrivalled, broad and complete solution portfolio. The integration of these solutions will also create one of the broadest offerings in the financial services space.
The deal is subject to customary closing conditions, including regulatory and court approvals, and the approval of more than two thirds of D+H shareholders, and is expected to close by the end of the third quarter 2017.
Credit Suisse and RBC Capital Markets are serving as financial advisors and provided fairness opinions to D+H, and Stikeman Elliott LLP and Cravath, Swaine & Moore LLP are serving as legal advisors. Morgan Stanley, along with Barclays and Citi, are serving as financial advisors to Vista Equity Partners. Kirkland & Ellis LLP and Goodmans LLP are serving as legal advisors to Vista Equity Partners. Evercore is serving as financial advisor to Misys.