Fundtech announced to the stock exchange today (Monday) that it has merged with Atlanta-based S1, as was first reported in "Globes." The merged company is valued at $700 million. Under the agreement, S1 shareholders will own approximately 55%, and Fundtech shareholders approximately 45%, of the combined company.
"Globes" reported two weeks ago that Clal Industries of the IDB Holding Corp. Ltd. (TASE:IDBH) group was in negotiations to sell its stake in Fundtech (58.6%). According to this morning's report to the stock exchange, the price of the acquisition is the share price at the close of trading on June 24.
Fundtech was founded and is managed by Reuven Ben Menachem (50), who owns 2.8% of its shares. The company supplies clearing and payment processing banking solutions for financial institutions. Fundtech's software solutions are part of the banks' core business, and over the last few quarters, the company has had positive business momentum. Following the end of the global crisis, which hurt the financial institutions, they are once again investing in infrastructure. Among Fundtech's clients are large banks, such as Barclays and HSBC.
IDB controls Fundtech through Clal Industries, its industry and high tech arm. Clal began its investment in Fundtech in 1998 when it purchased 11% of the company, at which point the company was valued at $173 million. Over the years, Clal steadily increased its stake in the company, and for example, in 2008, Clal made a special tender offer for 15% of Fundtech's shares at $12.50 a share (and a company valuation of $194 million). Following yesterday's jump in Fundtech's share price, the value of Clal's holding in the company is $179 million. Citibank is leading the deal.
Published by Globes [online], Israel business news - www.globes-online.com - on June 27, 2011
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