In a move with worldwide implications in the finance services industry, Vista Equity Partners announced Monday that it is acquiring D+H, a Toronto-based provider of technology solutions to financial institutions, in a $3.6 billion deal.
According to Vista Equity Partners, D+H will be merged with Misys, a global software provider for retail and corporate banking, lending, treasury and capital markets, investment management and enterprise risk based in the United Kingdom.
D+H is a winner of HousingWire Magazine’s 2017 HW Tech100 as one of the top tech companies in housing finance. Among the company’s offerings is Mortgagebot, a comprehensive, end-to-end solution for mortgage lending delivered via the cloud.
Upon completion of the deal, D+H and Misys will combine to create a “diversified fintech market leader, with a global footprint and the broadest set of financial software solutions available on the market with approximately $2.2 billion in revenues, around 10,000 employees and 9,000+ customers across 130 countries, including 48 of the top 50 banks,” the companies said in a release.
The companies added that the D+H and Misys are “highly complementary in terms of both software solutions and geographical footprint.”
In the release, the companies tout the upside of the combination of D+H's “strength in payments, lending, and retail banking solutions in North America” with Misys's “strength in capital markets, corporate banking, and retail banking globally.”
The companies say that the combined business will “serve customers all over the world with an unrivalled, broad and complete solution portfolio.”
Under the terms of the deal, Vista will acquire all of the outstanding shares of DH Corporation for $25.50 (Canadian) per share in cash including the assumption of all debt obligations including the issued convertible debentures, for a total enterprise value of approximately $3.6 billion USD.
“The combination of D+H and Misys creates a global leader in financial technology, with a broad array of products to serve customers,” Gerrard Schmid, CEO of D+H, said.
“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,” Schmid continued. “I believe this transaction is beneficial to our customers, shareholders and employees. We look forward to working closely with Vista and the leadership team at Misys to complete this transaction.”
Paul Damp, chairman of the board of D+H, said that the company views this deal as its best option moving forward.
“After a comprehensive review of strategic alternatives, the special committee of independent directors and our board have unanimously concluded that this agreement is in the best interests of the company and our stakeholders,” Damp said. “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.”
As for Misys, the company’s CEO, Nadeem Syed, said that the deal will allow the company to grow in North America.
“The combination of our two companies creates significant opportunity for our customers, our employees and our partners,” Syed said.
“By coming together, we have the opportunity to create a global fintech powerhouse, positioning us to lead the corporate banking software space, accelerate our cloud-based offerings, and expand our footprint in North America,” Syed continued. “The complementary nature of our two organizations combined with our robust domain expertise and strong leadership means that we will be able to bring even more value to our clients through our expanded offerings.”
The companies said that the deal is expected to close by the end of the third quarter of 2017.
“We are thrilled by the prospect of combining these two leaders in the fintech industry,” Brian Sheth, co-founder and president of Vista Equity Partners, said.
“D+H is an outstanding company with impressive talent and deep experience providing technology solutions to financial institutions worldwide,
Sheth continued. “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. Together, Misys and D+H have the promise to shape and lead the future of financial software.”