Core banking vendor Temenos is to move into the fast-growing funds admin business with a EUR235 million acquisition of Luxembourg-based Multifonds
Multifonds software is currently used by 9 of the top 15 fund administrators, including tier 1 financial institutions such as JP Morgan, Citi, BNP Paribas and Credit Suisse.
The software allows fund administrators to perform key accounting functions such as intra-day valuations and end-of-day NAV calculations as well as to support fund administrators in investor dealing and shareholder record keeping. Multifonds has over 470 employees in 14 offices globally.
Temenos is paying EUR235m to acquire the 20-year old business from a shareholder group led by growth equity investor Summit Partners. The transaction is being funded through a mixture of cash and debt.
The acquisition is expected to be around 4% accretive to non-IFRS EPS in 2015 (or around 6% on a pro-forma basis), rising to around 10% in 2016. Multifonds has been growing total revenues at around 10% per annum over recent years.
Temenos expects to incur restructuring charges of $11m in relation to this takeover, the acquisition of US-based Akcelerant and other cost rationalisation activities following a slack Q4.
Temenos CEO David Arnott says the combined proposition of Temenos’ securities processing, custody and enterprise data management functionality with Multifonds’ fund accounting platform creates a complete, integrated package for the fund management industry.
"Temenos now has best-of-breed software spanning private and wealth management, retail banking, transaction banking, compliance and fund administration, enabling us to offer a broad and highly compelling solution to meet our customers’ needs in a rapidly changing environment," he says. "Further, we achieve a greater level of scale with a higher proportion of recurring revenues, which will give us the size and the predictability to accelerate strategic investments to grow the overall business."
Oded Weiss, CEO of Multifonds, will continue to run the company along with its current management team.