Deutsche Börse to Buy SimCorp
Posted by Colin Lambert. Last updated: April 27, 2023
Deutsche Börse has entered into a binding agreement to acquire investment management technology provider SimCorp for EUR 3.9 billion. The transaction is subject to regulatory approvals and a minimum acceptance level of 50% plus one share of all SimCorp shares as well as other customary conditions. It is expected to be completed in the third quarter of this year.
The exchange group says SimCorp will complement Deutsche Börse AG’s existing data and analytics businesses and capabilities and allow the creation of a full scope front-to-back investment management solutions segment. “Benefitting from compelling strategic rationale and high complementarity, the combined business will sit at the heart of the investment management ecosystem as a leading provider of solutions across data, index, and analytics, and offer software solutions fully embedded in customer workflows,” Deutsche Börse says. “By joining forces, Deutsche Börse and SimCorp will be able to create significant value for clients, employees and all other stakeholders involved.”
The exchange group adds the deal will allow SimCorp to invest further in its business and that it views the management and employees of the company as a “key cornerstone”. SimCorp will continue to be headquartered and registered in Denmark.
SimCorp has confirmed that it intends to unanimously recommend its shareholders accept the offer, its executive management board and the board of directors have “irrevocably undertaken to accept the offer or otherwise sell their shares to Deutsche Börse”.
In parallel, Deutsche Börse says it aims to accelerate the development of its data and analytics. Jointly with General Atlantic it intends to combine Qontigo – which already has a relationship with SimCorp – and ISS, with General Atlantic becoming the sole minority shareholder of the combined Qontigo entity. Deutsche Börse and General Atlantic have jointly reached an understanding in principle on the intended combination aiming to form a leading combined ESG, data, index, and analytics provider, the exchange group states, adding, “This will allow them to explore value creating capital markets options including a potential IPO in the medium term.”
“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,” says Theodor Weimer, CEO of Deutsche Börse. “SimCorp A/S is a perfect fit strategically and culturally. It is one of the leading global investment management software providers, serving the largest asset managers and asset owners worldwide.
“Through our existing partnership we have come to know and appreciate the management of SimCorp A/S and the strategic transformation they have initiated, backed by a highly competent team of skilled employees,” he continues. “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.”