Fidessa confirms acquisition talks with Temenos

Maria Nikolova

Temenos is required, by not later than 5.00 pm on March 20, 2018, to announce a firm intention to make an offer for Fidessa or not.

Fidessa Group plc (LON:FDSA), a provider of trading, investment and information solutions to the financial services sector, has earlier today confirmed that it is in advanced discussions with Geneva-based software provider Temenos Group AG (SWX:TEMN) regarding a possible all cash offer by Temenos for the entire issued and to be issued share capital of Fidessa.

Under the proposed terms of the Possible Offer, Fidessa shareholders would receive £35.67 in cash for each Fidessa share along with the right to receive the final and special dividends announced on 19 February 2018 with Fidessa’s full-year results, which, in aggregate, are worth £0.797 per Fidessa share. As a result, the total value of the Possible Offer is therefore £36.467 per Fidessa share.

Fidessa notes that there can be no certainty that any offer will be made.

Temenos is required, by not later than 5.00 pm on March 20, 2018, to announce a firm intention to make an offer for Fidessa or announce that it does not intend to make an offer. This deadline can be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.

The announcement about the possible deal comes just a day after Fidessa posted its financial results for the year to December 31, 2017. Annual revenue was £353.9 million, up 7% on a reported basis of 7% (2016: £331.9 million). On a constant currency basis, revenue growth of 3% was at a similar level to 2016.

In line with expectations, the impact from consolidation and closures across the customer base reduced to 2% during 2017 (from 4% in 2016). During 2017 there have continued to be further consolidations and closures and Fidessa’s current expectation is that these will have a similar impact on revenue in 2018.

On a regional basis, 66% of total revenue was accounted for outside of Europe. The Americas grew 11% on a reported basis and 5% on a constant currency basis and continues to be the largest region, accounting for 45% of total revenue. Asia grew 7% on a reported basis and 2% on a constant currency basis and accounted for 21% of total revenue. Europe grew 1% on a reported basis, was flat on a constant currency basis and accounted for 34% of total revenue.

Total operating expenses for 2017 grew 7% to £305.1 million (2016: £283.9 million) with almost half of the increase due to foreign currency exchange rate movements.

Profit before tax for 2017 increased 2% to £50 million (2016: £48.8 million), being a margin of 14.1% (2016: 14.7%). On a constant currency basis, profit before tax for 2017 has decreased 2%.

Profit after tax of £35.7 million for 2017 was unchanged from 2016. Adjusted profit after tax grew 11% to £40.4 million (2016: £36.3 million).

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