GTCR Announces Proposal to Acquire Fundtech
September 14, 2011
Combination with BankServ to a create global leader in payments and banking technology.
GTCR, a leading private equity firm, today announced that, following completion of its due diligence and negotiations with Fundtech Ltd. (“Fundtech”), it has submitted a proposal to acquire Fundtech, a leading provider of transaction banking software and services to financial institutions, for $23.33 in cash for each Fundtech ordinary share (the “GTCR Proposal”). GTCR intends to combine Fundtech and BankServ, a GTCR portfolio company, creating a global leader in the growing market for payments and banking technology delivered to financial institutions and corporations.
Fundtech’s board of directors has determined that the GTCR Proposal constitutes a “Company Superior Offer” under Fundtech’s previously announced merger agreement with S1 Corporation (“S1”). Fundtech has delivered the required notice to S1 of its intent to change its recommendation in favor of the merger with S1 and to terminate the S1 merger agreement and enter into a written definitive agreement relating to the GTCR Proposal, subject to the terms of the S1 merger agreement, including S1’s right to propose within five business days changes to the S1 merger agreement if applicable. The GTCR Proposal contemplates that Fundtech’s largest shareholder, Clal Industries and Investments Ltd., which currently owns approximately 58% of the ordinary outstanding shares of Fundtech, would vote in favor of the transaction. Subject to receipt of Fundtech shareholder approval and satisfaction of other conditions, the transaction would be expected to close in the fourth quarter of 2011.
Fundtech is a leading global provider of software solutions and services that facilitate payments processing, financial messaging and cash management for more than 1,000 financial institutions in more than 70 countries. BankServ is a leading U.S. SaaS (software-as-a-service) provider of financial services and banking technology that offers wire transfer, SWIFT messaging, remote deposit capture, mobile and online payment processing technology to over 500 financial institutions and corporations. The combined company would be a global industry leader in payments and banking technology with a comprehensive suite of solutions serving the needs of financial institutions and corporations around the world.
The combined company, Fundtech, Inc., would have its headquarters at Fundtech’s U.S. headquarters in Jersey City, New Jersey. Reuven Ben Menachem, founder and chief executive officer of Fundtech Ltd, would serve as chief executive officer of Fundtech Inc. David Kvederis, founder and chief executive officer of BankServ, would support the integration of BankServ and Fundtech as a member of Fundtech Inc.’s board of directors. Management from both predecessor companies would participate in the future growth and success of the combined business.
“Fundtech is a premier financial technology franchise, and combining these two complementary companies would create an industry leader in the growing market for innovative banking technologies and electronic corporate payments,” said Collin Roche, GTCR principal. “Together, these businesses would participate in all segments of the global market with best-of-breed technologies and a broad product offering. Existing customers can expect the continuation of excellent technology and service quality that is a benchmark of each of these companies.”
“GTCR’s extensive experience investing in payment processing and banking-related businesses makes them a strong partner to support the continued growth of Fundtech,” said Mr. Ben Menachem, CEO of Fundtech. “We remain committed to delivering best-in-class technology and innovative solutions to serve the needs of our customers around the world, and a partnership with GTCR would allow us to accomplish that goal.”
“We are excited to have the opportunity to partner with Reuven Ben Menachem and the combined management teams to continue building a leading financial technology company,” said Aaron Cohen, GTCR vice president. “We expect the combined company to continue its investment in technology and service offerings for global growth, supplemented by selective acquisitions.”
Skadden, Arps, Slate, Meagher & Flom LLP and Herzog, Fox & Neeman served as legal counsel to GTCR. Moelis & Company, RBC Capital Markets and BMO Capital Markets served as financial advisors to GTCR. Royal Bank of Canada, BMO Capital Markets and Newstone Capital Partners provided debt financing in connection with the proposed transaction. GTCR’s proposed investment in Fundtech will be made from GTCR Fund X, a private equity fund raised in 2011 with $3.25 billion of committed capital.
Founded in 1980, GTCR is a leading private equity firm focused on investing in growth companies in the Financial Services & Technology, Healthcare and Information Services & Technology industries. The Chicago-based firm pioneered the “Leaders Strategy”—finding and partnering with world-class leaders as the critical first step in identifying, acquiring and building market-leading companies through acquisitions and organic growth. Since its inception, GTCR has invested more than $8.5 billion in over 200 companies. For more information, please visit www.gtcr.com.
Fundtech (NASDAQ:FNDT), was founded in 1993, and is a leading provider of software and services to banks of all sizes around the world. Payments systems include wire transfers, ACH origination, cross-border payments and remittance. Cash management systems are designed for large corporate through small business clients. Fundtech operates the world’s largest SWIFT service bureau. Fundtech offers an extensive line of financial supply chain applications including electronic invoice presentment and supply chain financing. Fundtech is the leading provider of CLS systems to the world’s largest banks. More than 1,000 clients throughout the world rely on Fundtech solutions to improve operational efficiency and provide greater competitiveness through innovative business-to-business services. For more information, visit www.fundtech.com.
Founded in 1996, BankServ develops SaaS-based payment systems used by banks and corporations to transfer money quickly and efficiently around the world. The company’s product lineup includes systems for wire transfers, SWIFT messaging and connectivity, remote deposit capture, online payments, mobile banking and more. Headquartered in Las Vegas, BankServ has offices in San Francisco, Salt Lake City and London. For more information, visit www.bankserv.com.