Under the terms of the definitive agreement, Fundtech will pay EUR 4.0 million in cash at closing and an additional amount of up to EUR 4.0 million in cash will be paid over the next four years, based on the financial performance of Prang.
Prang is a leading provider of payments solutions on the IBM iSeries platform with over 50 installations in Germany and other international markets. The company was founded in 1991 by Dieter Prang. It has been awarded a SWIFT Ready Gold product label, works in close cooperation with the Deutsche Bundesbank for German payments clearing, and is a member of the European Banking Association (EBA).
Significant changes are underway in the payments landscape in Europe including the Single European Payments Area (SEPA) and TARGET2. Together with Fundtechâs comprehensive SEPA payment system offering for larger banks in this market, Prangâs SEPA products will further enhance Fundtechâs market reach.
âThe acquisition is part of Fundtechâs growth strategy to align with profitable companies with strong management in important geographic markets,â said Reuven Ben Menachem, CEO of Fundtech. âPrang complements our European strength in terms of market knowledge, management skills and a strong drive to understand and address our customersâ needs. We welcome Prangâs employees and clients into the Fundtech family and look forward to our mutual success.â
Dieter Prang, CEO of Prang, commented, âWe are delighted to become part of the Fundtech group of companies. The new SEPA regulations have created a need for advanced technology and domain expertise that Fundtech and Prang possess. Prangâs employees and clients will benefit from this combination and we will be able to offer them new opportunities, products and services.â
Fundtech expects the transaction to be neutral to EPS in 2007, excluding non-cash charges to amortize certain acquired intangible assets. Prang reported un-audited revenues of EUR 2.5 million for the twelve month period ended December 31, 2006.