Deutsch Boerse has made a €3.9bn offer to purchase Danish software company SimCorp as it looks to bolster its investment management solutions arm.
In a statement, the German exchange said it would offer DKK735 ($108.9) per share in an all-cash public takeover bid, a 38.9% premium on SimCorp’s closing share price of DKK529.
Alongside the deal, Deutsche Boerse said it plans to merge its index provider Qontigo and its ESG data provider International Shareholder Services (ISS) to create a leading ESG, data, index and analytics provider.
It hopes the acquisition, along with the merger, will lead to “value creation created from upselling and cross-selling opportunities”.
The group expects both deals to create run-rate EBITDA synergies of around €90m per year within the first three years of completion, of which €55m are cost synergies and €35m are revenue synergies.
It added a one-off cost of €100m would be incurred to create these.
According to the announcement, the SimCorp board of directors has unanimously recommended its shareholders accept the offer.
The deal, which is expected to complete in Q3 this year, would be subject to regulatory approvals from the Danish Financial Supervisory Authority and a minimum acceptance level of 50% plus one share of all SimCorp shares.
It said the deal would allow SimCorp to become a leading software-as-a-service (SaaS) and business-process-as-a-service (BPaaS) player for global asset owners, asset managers and asset servicers.
The deal would see the business continue to operate under the SimCorp brand and maintain its headquarters in Denmark.
Under the merger of ISS and Qontigo, US private equity firm General Atlantic would become the sole minority shareholder of the business.
Following the deal, it hopes to explore “value and capital markets options” including a potential Initial Public Offering (IPO) in the medium term.
Theodor Weimer, CEO of Deutsche Boerse, said: “Through our existing partnership we have come to know and appreciate the management of SimCorp and the strategic transformation they have initiated, backed by a highly competent team of skilled employees.
“In addition to the SimCorp transaction, we have decided to merge ISS and Qontigo. Both transactions will bring long-term growth, sizeable and tangible synergies, and a significant increase in our recurring revenues.”
Peter Schütze, chair of the board of directors of SimCorp, added the offer represents an attractive value for the shareholders of SimCorp as the company accelerates its transformation to a full-scale SaaS and BPaaS provider.
“Deutsche Boerse is well-positioned to contribute to the realisation of the long-term potential of SimCorp, and the offer is a clear testament to the strong position and prospects of SimCorp in a global investment industry undergoing fundamental changes and seeing rising demand for integrated technology platforms," he said.
Deutsche Boerse acquired ISS in 2020 as it looked to gain a foothold in the ESG data space.