IBS Journal May 2015
Fundtech sold to D+H Corporation for $1.25 billion
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The timing is right too, he continued, as the merger of Harland and D+H’s US business has now been completed. D+H was ready for further takeovers and searching for an acquisition target that offered proven, in-demand technology, strong cash flows, recurring revenues and a large customer base, he said. ‘Fundtech meets all these requirements.’ In 2014, Fundtech recorded revenues of $263 million (nine per cent year-on-year growth). ‘It has strong management, deep domain expertise and a diverse client base, from central banks, to commercial banks of all sizes, plus a growing number of corporates that want white-labelled cash management solutions. It will propel us into the payments software space.’ With Harland’s core banking software and Fundtech’s pay-
ments solutions, D+H will be able to support ‘the two main pillars of banking’, Schmid stated. ‘This is especially important as banks look to consolidate with fewer, trusted providers.’ Oth- er ‘mega trends’ that he sees as beneficial for the Fundtech/ D+H business comprise ‘the proliferation of new payments channels, banks’ focus on high margin transaction banking,
Gerrard Schmid, D+H Corporation
outdated legacy platforms, and complex and growing regula- tory compliance environment.’ Fundtech is D+H’s ninth acquisition and the largest to date.
‘For sale’ signs come down at Monitise
Troubled mobile payments provider, Moni- tise, has completed a strategic review and intends to remain as an independent com- pany. On the back of heavy losses, the com- pany had previously suggested that a sale or new share issue was likely. A formal sale process started in January but has now been halted. The company has said it is confident of returning to profit in 2016, in part by reducing its cost base. Moelis & Company had been appoint-
ed by Monitise as its financial advisor to broker investment options. In a statement, Monitise said there were expressions of interest but ‘the board has concluded that the best way of maximising long-term val- ue for shareholders is to continue as an independent company’. The announcement included an
expression of support from one of the shareholders, Santander, while another, Telefonica, is providing a non-executive board member, its consumer CEO, Stephen Shurrock. At the helm, co-CEO, Elizabeth
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America. It is stated that additional market opportunities will be pursued where they directly support partner needs. The com- pany had already started to reduce costs, including moving 250 staff, representing 20 per cent of its headcount, to IBM (the latter was thought to be a potential buy- er). Monitise will now focus development on core products, alongside new initiatives including centralising its R&D from a hub in Istanbul. Monitise reiterated guidance for FY
Elizabeth Buse, Monitise ©World Economic Forum, Flickr
Buse, becomes CEO, with founder and co-CEO, Alastair Lukies, stepping down from the board but retaining an adviso- ry role. Monitise’s focus will now be on sales in Europe, the Middle East and North
© IBS Intelligence 2015
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2015 as revenues of £90-100 million and EBITDA loss of £40-50 million (initial guid- ance had been for a loss of £33 million) but with EBITDA profitability in FY 2016. In Sep- tember 2014, Visa, one of Monitise’s major investors, said it was considering selling its stake after its shares were diluted to 5.5 per cent (it had originally taken a 14.4 per cent stake in the company in 2009). However, in November, Santander, Telefonica and Mas- tercard pledged nearly £50 million in equi- ty investment.
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