Overlap expected in business banking, corporate cash management

S1 Corp to buy Fundtech in $700M deal

Financial services provider agrees to purchase Tel Aviv-based company after latter holds talks with potential buyers. Deal to help boost international presence, companies say

Financial services provider S1 Corp. agreed to buy Fundtech Ltd. in a stock deal valued at about $700 million, just weeks after the Tel Aviv-based company confirmed it was in talks with potential buyers.


Fundtech – whose shares were up more than 5% on Monday morning – shareholders will receive 2.72 shares of S1 common stock for each Fundtech ordinary share they own, according to the merger agreement.


In a joint conference call, the companies said the new company will have a wider international reach. S1, which is present in Latin America and Africa, will tap Fundtech's presence in India and Western Europe to expand in those areas.


There will be an overlap in the business banking and corporate cash management segments, the companies said.


"The merger makes a lot of sense because both companies, though relatively small, cater to some of the largest banks in the world, and the merger will help fill the gaps in their products, which will make them more attractive," said analyst John Kraft of D.A. Davidson & Co.


Zero debt

S1 and Fundtech, which have zero debt, cater to big names in the banking industry including JPMorgan Chase, Citi , UBS and Barclays.


S1 shareholders will own about 55% of the combined company and Fundtech shareholders the rest, the companies said in a joint statement on Monday.


The combined company, which will be headquartered at Atlanta and will be called Fundtech, will be led by S1 Chief Executive Johann Dreyer.


The deal is expected to add to S1's 2012 adjusted earnings.


Excluding merger-related costs, both companies have backed their 2011 outlook.


Fundtech, a provider of payment systems and services, said on June 14 that it had been approached by a multinational corporation with an interest in acquiring it.



פרסום ראשון: 06.29.11, 07:50
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