Deutsche Börse offers EUR 3.9 billion for acquisition of SimCorp
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.
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.
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.