German stock exchange Deutsche Börse is set to acquire SimCorp, a vendor that provides software and technology services to businesses in the finance sector. The €3.9bn deal is part of a move by Deutsche Börse to build out its tech offering with more data and analytics services.
Announced this morning, the deal is been recommended by the board of Denmark-based SimCorp, and will see Deutsche Börse, which operates Germany’s Frankfurt stock exchange, pay 735 Danish Kroner (€98) per share for the business. This represents a 38% premium on SimCorp’s closing share price on Wednesday, the companies said.
Deutsche Boerse set to acquire SimCorp
Founded in 1971, SimCorp offers its clients an investment management platform, as well as the ability to process and interpret financial data. Based in Copenhagen, it employs 2,300 people in 25 offices around the world, including in the UK, and says it works with more than 300 clients in the financial services sector. It posted revenue of $561m last year, with profit of €126m.
The two companies have been working closely together since 2021 through a partnership between SimCorp and Deutsche Börse’s Qontigo financial intelligence business unit. As part of the takeover, Qontigo and another of the exchange’s data and analytics offerings, ISS, will be combined under the SimCorp umbrella.
A Deutsche Börse statement said the company “firmly believes that SimCorp will significantly benefit from becoming an integral part of Deutsche Boerse’s group of companies”.
It added: “As a provider of investment management Software-as-a-Service (SaaS) and Business-Process-as-a-Service (BPaaS) solutions at scale, SimCorp will continue to be well positioned as an independent leading front-to-back investment management solutions platform. By joining forces, Deutsche Börse and SimCorp will be able to create significant value for clients, employees and all other stakeholders involved.”
The growing importance of tech and analytics for stock exchanges
Theodor Weimer, CEO of Deutsche Börse 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 is a perfect fit strategically and culturally.”
Providing enhanced data and analytics services is an increasingly important area for stock exchanges as financial trading is digitally transformed. Last year, London Stock Exchange Group, which operates the London markets, merged with financial data provider Refinitiv in a €27bn deal aimed at building out its capabilities in this area.
Peter Schütze, chair of the board of directors of SimCorp, said the offer “represents attractive value for the shareholders of SimCorp as the company accelerates its transformation to a full-scale SaaS and BPaaS provider to deliver sustained long-term profitable growth”.
Schütze added: Deutsche Börse is well-positioned to contribute to the realisation of the long-term potential of SimCorp, and the offer is a clear testament to the strong position and prospects of SimCorp in a global investment industry undergoing fundamental changes and seeing rising demand for integrated technology platforms.”