Deutsche Börse With 3.9 Billion Euro All-Cash Takeover Offer for SimCorp

Deutsche Börse With 3.9 Billion Euro All-Cash Takeover Offer for SimCorp

by May 3, 2023

Deutsche Börse has announced a binding agreement with SimCorp  in which it will make an all-cash voluntary public takeover offer to acquire all shares of Denmark’s SimCorp A/S, valuing the firm at €3.9 billion.

The offer price represents a premium of 38.9% and 45.3% to the closing share price and 3-month volume-weighted average price as of 26 April 2023, respectively. The transaction is expected to be completed in Q3 2023, subject to regulatory approvals and customary conditions.

The acquisition of SimCorp A/S, a provider of investment management software and related technology services, will complement Deutsche Börse AG’s existing data and analytics businesses, paving the way for a comprehensive front-to-back Investment Management Solutions segment.

The combined entity will expand Deutsche Börse total addressable market with expertise across data, index, and analytics, and build upon the previous collaboration initiated in 2021 with Qontigo, a Deutsche Börse AG subsidiary.

Additionally, SimCorp A/S will continue to operate as an independent front-to-back investment management solutions provider, operating as an open platform under its established brand name. Deutsche Börse AG will also maintain SimCorp’s global operational presence, along with the the SimCorp Group headquarters and registered office in Denmark.

SimCorp’s Board of Directors has confirmed its unanimous recommendation for shareholders to accept the offer. Members of SimCorp A/S’s Executive Management Board and Board of Directors have also committed to accept the offer, subject to customary conditions.

At the same time, Deutsche Börse plans to accelerate the development of its Data & Analytics segment, intending to combine Qontigo and ISS with General Atlantic as the sole minority shareholder of the combined Qontigo entity. This will create a combined ESG, data, index, and analytics provider, exploring value-creating capital market options, including a potential IPO in the medium term.

The synergies from the cooperation and partnerships within the group are expected to generate around €90 million in annual EBITDA synergies within three years of completing the offer, with a one-off cost of €100 million. These synergies include €55 million in cost synergies and €35 million in revenue synergies.

Theodor Weimer

Theodor Weimer

“Through our existing partnership we have come to know and appreciate the management of SimCorp A/S and the strategic transformation they have initiated, backed by a highly competent team of skilled employees,”

said Theodor Weimer, CEO of Deutsche Börse AG.

“In addition to the SimCorp A/S transaction, we have decided to merge ISS and Qontigo. Both transactions will bring long-term growth, sizeable and tangible synergies, and a significant increase of our recurring revenues. We would be delighted to welcome SimCorp A/S, which has been a trusted business partner for many years, to Deutsche Börse Group and to embark on this exciting journey together.”

Peter Schütze

Peter Schütze

“The Board of Directors finds that the offer from Deutsche Börse AG represents attractive value for the shareholders of SimCorp A/S as the company accelerates its transformation to a full-scale SaaS and BPaaS provider to deliver sustained long-term profitable growth,”

stated Peter Schütze, Chair of the Board of Directors of SimCorp A/S.

“Deutsche Börse AG is well-positioned to contribute to the realisation of the long-term potential of SimCorp A/S, and the offer is a clear testament to the strong position and prospects of SimCorp A/S in a global investment industry undergoing fundamental changes and seeing rising demand for integrated technology platforms.”

Deutsche Börse will finance the acquisition with cash and debt, having entered into a fully underwritten bridge facility with Morgan Stanley.

Featured image credit: Theodor Weimer, CEO of Deutsche Börse AG and Peter Schütze, Chair of the Board of Directors of SimCorp A/S