- – Deutsche Börse AG to launch an all-cash voluntary recommended public takeover offer for all shares (except treasury shares) in SimCorp A/S for DKK 735.0 per share in an all debt-financed transaction, valuing SimCorp A/S at EUR 3.9 billion
- – The offer price represents a 38.9 per cent premium and a 45.3 per cent premium over the closing price of DKK 529.0 and the 3-months volume-weighted average price of DKK 505.7 as of 26 April 2023, respectively
- – The Board of Directors of SimCorp A/S has unanimously decided that it intends to recommend the shareholders of SimCorp A/S to accept the offer when it is published
- – The transaction is expected to be mid-single digit cash earnings per share accretive in the first year after completion based on the expected annual run rate synergies
- – In parallel to the takeover of SimCorp A/S, Deutsche Börse AG intends to combine its existing data & analytics subsidiaries Qontigo and ISS under one leadership. Upon completion of the offer, the combination of Qontigo/ISS and SimCorp A/S will be grouped within a newly created Investment Management Solutions segment to drive further growth, efficiencies, and full value crystallisation. This includes the option of a potential IPO for the combined ISS/Qontigo business in the medium term
- – Within 3 years of completion of the offer, Deutsche Börse AG expects total annual run rate EBITDA synergies of around EUR 90 million, of which around EUR 55 million are cost synergies and around EUR 35 million are revenue synergies, with a one-off cost to achieve these synergies of around EUR 100 million
Frankfurt, Germany, and Copenhagen, Denmark, 27 April 2023 – Deutsche Börse AG and SimCorp A/S have today entered into a binding agreement, pursuant to which Deutsche Börse AG will make an all cash voluntary recommended public takeover offer to acquire all of the shares (except treasury shares) in SimCorp A/S at a price of DKK 735.0 per share, adjusted for any dividends or other distributions paid by SimCorp A/S prior to completion of the offer, valuing the entire issued capital of SimCorp A/S at EUR 3.9 billion. The offer price represents a 38.9 per cent premium and a 45.3 per cent premium to the closing share price of DKK 529.0 and 3-months volume-weighted average price of DKK 505.7 as of 26 April 2023, respectively. The transaction is subject to regulatory approvals and a minimum acceptance level of 50% plus one share of all SimCorp A/S shares as well as other customary conditions and is expected to be completed in the third quarter of this year.
SimCorp A/S, a renowned provider of investment management software and associated technology-enabled services, will seamlessly complement Deutsche Börse AG’s existing data and analytics businesses and capabilities and allow the creation of a full scope front-to-back Investment Management Solutions segment. Benefitting from compelling strategic rationale and high complementarity, the combined business will sit at the heart of the investment management ecosystem as a leading provider of solutions across data, index, and analytics, and offer software solutions fully embedded in customer workflows. The transaction will significantly expand Deutsche Börse AG’s total addressable market and builds on the already successful cooperation initiated in 2021 between SimCorp A/S and Qontigo, a subsidiary of Deutsche Börse AG.
Deutsche Börse AG firmly believes that SimCorp A/S will significantly benefit from becoming an integral part of Deutsche Börse AG’s group of companies. As a provider of investment management SaaS (Software-as-a-Service) and BPaaS (Business-Process-as-a-Service) solutions at scale, SimCorp A/S will continue to be well positioned as an independent leading front-to-back investment management solutions platform. By joining forces, Deutsche Börse AG and SimCorp A/S will be able to create significant value for clients, employees and all other stakeholders involved. The combination will strengthen the ability of SimCorp A/S to transform its business model and further invest in innovation to become a leading SaaS and BPaaS player for global asset owners, asset managers, and asset servicers, operating as an open platform that delivers both flexibility and operational efficiency under the strong brand name of SimCorp A/S. Deutsche Börse AG views the management and employees of SimCorp A/S as a key cornerstone for SimCorp A/S’s future success and intends to preserve SimCorp A/S’s current global operational presence, including maintaining the headquarters of the SimCorp Group as well as the registered office in Denmark.
The Board of Directors of SimCorp A/S has confirmed that it intends to unanimously recommend the shareholders of SimCorp A/S to accept the offer when made in the form of an offer document approved by the Danish Financial Supervisory Authority. Members of the Executive Management Board and the Board of Directors of SimCorp A/S have irrevocably undertaken to accept the offer or otherwise sell their shares to Deutsche Börse AG at the offer price on the terms and conditions applicable to the offer, subject to certain customary conditions and any restrictions applicable under the Remuneration Policy or existing incentive programme of SimCorp A/S.
In parallel, Deutsche Börse AG aims to accelerate the development of its Data & Analytics segment to drive additional growth and efficiencies. Jointly with General Atlantic it intends to combine Qontigo and ISS, with General Atlantic becoming the sole minority shareholder of the combined Qontigo entity. Deutsche Börse AG and General Atlantic have jointly reached an understanding in principle on the intended combination aiming to form a leading combined ESG, data, index, and analytics provider. This will allow them to explore value creating capital markets options including a potential IPO in the medium term.
Together with SimCorp A/S, the intended Qontigo/ISS combination will transform Deutsche Börse AG’s Data & Analytics segment into an Investment Management Solutions segment. The cooperation and partnerships within the Group will lead to significant value creation generated from upselling and cross-selling opportunities, a strengthening of the ESG offering as well as rationalisation of certain corporate functions with total estimated run-rate EBITDA level synergies of around EUR 90 million per year within 3 years of completion of the offer, with one-off cost to achieve these synergies of around EUR 100 million. Out of these synergies, around EUR 55 million are cost synergies, mainly identified within Deutsche Börse Group’s current Data & Analytics segment operations, and around EUR 35 million are revenue synergies.
Theodor Weimer, CEO of Deutsche Börse AG, said: “Over the last couple of years we have significantly enhanced our data and analytics capabilities with a strong strategic focus to further develop within the investment management business. SimCorp A/S is a perfect fit strategically and culturally. It is one of the leading global investment management software providers, serving the largest asset managers and asset owners worldwide. 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. 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, Chair of the Board of Directors of SimCorp A/S, said: “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. 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 AG will fully finance the SimCorp A/S offer with cash and debt. It has entered into a fully underwritten bridge facility with Morgan Stanley, which is expected to be refinanced by an optimal mix of existing cash and debt capital market instruments. The envisaged funding of the proposed transactions is expected to result in an AA- rating at Group-level and maintaining AA at Clearstream-level. Deutsche Börse AG is committed to preserving a strong investment grade rating both at Group-level and Clearstream-level following the completion of the transactions.
An Analyst & Investor Call will take place today, 27 April 2023, at 9a.m. CEST. To participate in the conference call, registration is required using the following link: https://webcast.meetyoo.de/reg/CcsSCN819MsM
Media is invited to join but will not be able to ask questions.
A dedicated Media Call will take place today, 27 April 2023, at 10:30a.m. CEST. To participate in the conference call, registration is required using the following link: https://webcast.meetyoo.de/reg/lPiyFzmKj25I
Deutsche Börse AG has appointed Morgan Stanley & Co. International plc (lead) and Deutsche Bank AG as financial advisors as well as Plesner Advokatpartnerselskab, Hengeler Mueller Partnerschaft von Rechtsanwälten mbB, Linklaters LLP (financing), and Cravath, Swaine & Moore LLP (U.S. counsel) as legal advisors in connection with the transactions.
