THE BIG INTERVIEW
IBS Journal August 2017
35
Marshalling a mega-merger: how fintech giant Finastra came to be
Nadeem Syed sat down with Alex Hamilton to map out the year’s most talked-about merger. With transformative banking, symbiosis and 1+1 sometimes equalling 3, Finastra is charting its path to the stars
Senior Reporter Alex Hamilton
I
t’s safe to say that Nadeem Syed, CEO of Finastra, has been a busy man in the past few months. Seeing through the creation of the world’s third-largest financial software firm is bound to give you a few sleepless nights, yet with the two companies being so complementary, he says, the process was easier than he expected.
“The industrial logic of this merger has been apparent for quite some time,” Syed tells me. “I’ve had a number of interactions with Gerard (Schmid, CEO of D+H) over the last few years because the two companies are incredibly synergistic. When we saw the opportunity, we had to go for it.
“I’ve been in the software industry for 30-odd years and very rarely are two firms that complementary,” he said. Misys, he adds, has always had a great representation among the top banks. “48 of the top 50 banks are Misys customers. If you look at the revenue mix, 83% of Misys revenue used to come from the rest of the world and 17% from the US and Canada. D+H is US focused and built around consumer mortgages and payments. 88% of its revenue was out of the Americas and the customer segmentation placed a lot of its clients in the lower end of the industry.” That type of non-existent overlap made the deal a no-brainer on both sides.
In late autumn 2016, D+H announced that it would be going through a “strategic overview” of its options. Vista Equity Partners, owner of Misys, was keen to explore the option of a strategic merger. According to Syed, many at the Private Equity firm were aware of the symbiotic nature of both Misys and D+H. Vista won the bidding process for D+H and announced the acquisition and merger in March 2017. There was a small delay as D+H was moved from a publicly owned company into the private space, but the process was “sailed through seamlessly”.
Nadeem Syed: Looking forward to exciting time following the creation of financial giant Finastra
Syed says he’s enjoyed “every day” of the process, despite being “right in the thick of things”. He describes the deal as a “tremendous window of intense activity”. There was a fairly intense period of due diligence, admits the Finastra CEO, but once that was over things moved along nicely. “What is pretty refreshing from my perspective is that the two teams came together quite well. Even in the early days of the integration the logic was evident to everybody. The level of excitement around being the third-largest fintech company in the world and being a $2 billion business is palpable.”
That excitement is also being generated by clients. “The fact that we’re enthusiastic is great, but I prefer that our customers get excited, which is definitely the case here.” They’re seeing the opportunity, he adds, of having a single provider with the
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