UPDATE 1-Canada's D+H Corp to buy payment services firm Fundtech
(Adds details, CEO comments, background)
By Euan Rocha
March 30 (Reuters) - Canadian financial technology firm D+H said on Monday it agreed to acquire global payment services provider Fundtech for $1.25 billion in cash, in a bid to expand its service offerings aimed at global financial institutions and large U.S. banks.
New York-based Fundtech, with some 1,500 employees and 19 offices globally, provides a comprehensive line of transaction banking software that facilitates global and domestic payments, along with financial messaging, corporate cash management and merchant services.
The deal comes nearly two years after it acquired U.S. rival Harland Financial Solutions for about $1.2 billion in cash from Harland Clarke Holdings Corp. That deal was aimed at broadening D+H's offerings for online and mobile banking, branch automation and commercial lending, primarily around community banks and credit unions.
Toronto-based D+H said the Fundtech acquisition deepens its U.S. customer base and broadens its prospects in North America. It will now service eight of the top 10, and 32 of the world's top 50 banks, along with about 190 of the top 300 U.S. banks.
"Payments are massively important to banks these days and Fundtech is a market leader in payment hubs," said D+H Chief Executive Gerrard Schmid in an interview, adding that this deal will give D+H scale in a technology area that is currently very relevant for banks as payment systems are evolving rapidly.
The deal, which is subject to regulatory approvals, is seen closing in the second quarter of fiscal 2015.
In order to fund the takeover, D+H is raising C$626 million ($494 million) via an equity issuance and some C$200 million in a concurrent convertible debt offering. Continued...