Swiss listed banking tech giant Temenos is making a big play for the APAC market after gaining massive ground on global software kingpins like Oracle in other regions, and has just signed an agreement to acquire ASX-listed fintech Rubik Financial in a AU$68 million takeover bid at $0.1667 per share.
Through the deal the Swiss banking software provider’s plans to accelerate its growth in the Australian market, one of four major growth areas the $6.5 billion (CHF5.1 billion) company sees as key in the APAC region.
Key details of the deal:
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Temenos AG Group (“Temenos”) and Rubik Financial Limited (“Rubik”) have entered into a binding scheme implementation deed following a 10-year business partnership in Australia.
Temenos will acquire 100% of the issued capital of Rubik for a cash consideration of AUD$0.1667 per share, valuing Rubik’s equity at approximately AUD$68 million (US$50 million) on a fully diluted basis. Rubik will be rebranded in Australia as Temenos.
Rubik’s Board of Directors, which includes former Westpac NZ CEO Peter Clare, has unanimously recommended that its shareholders vote in favour of the Scheme.
Rubik’s three largest shareholders, Viburnum Funds Pty Ltd as manager of Viburnum Funds Pty Ltd ATF VF Strategic Equities Fund (“Viburnum”), LHC Capital Partners Pty Ltd, and Regal Funds Management Pty Ltd will vote in favour of the acquisition.
Rubik has appointed Grant Thornton as the Independent Expert to prepare a report on whether the Scheme is in the best interests of Rubik shareholders.
Temenos is recognised globally as the expert specialist in Banking and Financial Services software, and this move will see the company positioned as a clear market leader in a space that includes Oracle, Tata, Infosysis and SAP and capitalise on the growth in the Australian market. In particular, it will enable Temenos to benefit from increased scale and to accelerate growth across its key target segments including wealth, core banking, and fund administration.
Rubik CEO, Iain Dunstan said, “Having enjoyed a strong partnership with Temenos for a number of years, today’s announcement represents a positive result for all Rubik stakeholders. It is compelling in that, if approved, the offer delivers a significant premium to Rubik’s recent share price and provides certainty of value for our shareholders. If implemented, we believe the Scheme will have a positive impact for both our existing clients and prospective clients by providing access to the significant resources of Temenos as a market leading wealth, banking and finance software specialist”.
Commenting on the acquisition, Temenos CEO David Arnott said, “We are delighted to announce the proposed acquisition of Rubik, which will create a leader in the fast growing Australian financial software market by combining Rubik’s local knowledge and product set with Temenos’ global expertise and world class solutions.
In particular, Rubik’s expertise and offering in the wealth space are highly complementary to our existing products, and a key aspect of the acquisition for Temenos given the size of this opportunity in the domestic market.
We are increasingly seeing banks around the globe addressing the structural pressures they are facing through core renovation with digital at the heart of their strategy. By acquiring Rubik, we will be able to provide a complete vertically integrated solution for the Australian banking market, enabling our clients to realise their digital ambitions.
The acquisition will bring us scale and allow us to accelerate our penetration and growth in the Australian market across wealth, core banking and fund administration.”
Rubik has, with the approval of its independent directors, also entered into a $5 million short-term bringing loan, on arms’ length terms, with Viburnum (“Loan”). The purpose of the Loan is to ensure the timely delivery of a number of recently signed customer contracts.
Temenos head of APAC Martin Frick answers some short interview questions:
Why has Temenos moved to acquire Rubik Financial? What opportunity does Temenos see in the APAC market in 2017 and into the long-term?
Temenos is acquiring 100 per cent of the shares in Rubik. The acquisition is an important part of our strategy to increase scale and to accelerate growth across its key target segments including wealth, core banking and fund administration in Australia and in Asia.
The combined company will expand our expertise in the target segment, deliver an unprecedented breadth of solutions and position Temenos as the market leader to capitalize on the growth opportunities in the Australian banking and financial space.
The proposed acquisition will provide Temenos with an immediate and established presence within the fast growing Australia financial software market – one of the few developed markets where the company is currently under-represented. This will enable us to compete much more effectively, providing us access to top tier organizations while allowing our joint-customers to benefit from our increased global footprint and a broader portfolio of products and integrated solution offering.
What are Temenos’s goals for the APAC region and how will the acquisition of Rubik help it to succeed?
We are delighted to announce the proposed acquisition of Rubik Financial, which will create a leader in the fast growing Australian financial software market by combining Rubik’s local knowledge and product set with Temenos’ global expertise and world class solutions. In particular, Rubik’s expertise and offering in the wealth space are highly complementary to our existing products, and a key aspect of the acquisition for Temenos given the size of this opportunity in the domestic market.
We are increasingly seeing banks around the globe addressing the structural pressures they are facing through core renovation with digital at the heart of their strategy. By acquiring Rubik, we will be able to provide a complete vertically integrated solution for the Australian banking market, enabling our clients to realise their digital ambitions. The acquisition will bring us scale and allow us to accelerate our penetration and growth in the Australian market across wealth, core banking and fund administration.
What your view of the broader fintech market in APAC and how does Temenos/Rubik fit into this?
As individual wealth in Asia grows, there is an increasing need for the banking system to move into the digital age. We are bringing Rubik’s people, knowledge and technology into the Asia market through the scale and distribution of Temenos’s global enterprise. We will bring leading digital wealth management to the market to help with individual wealth planning. The acquisition of Rubik allows us to leverage their key digital wealth management products in the APAC market.
Featured picture via http://www.rubik.com.au/
