Bottomline Technologies has acquired Sterci and Simplex for a combined total of US$109m in order to boost its financial messaging technology capabilities.
The $104m deal for Swiss-based Sterci has already been completed. A separate $5m agreement to acquire the 49% of the London-based Simplex firm that Sterci does not already own is expected to complete within the next 30 days.
Sterci purchased a 51% controlling stake in Simplex in 2011 and the pair use the Swift global messaging network on behalf of over 350 customers across 20 different countries. All of this will soon be at the command of US-based Bottomline Technologies after this latest merger and acquisition (M&A) activity.
Bottomline said that the acquisitions, combined with its own existing financial messaging business, will create a new global centre of excellence in financial messaging. The combined entity will serve more than 530 global institutions and corporations in key financial hubs such as London, Geneva, Frankfurt, Singapore, Paris, New York and Toronto.
Commenting on the deal, Rob Eberle, president and chief executive officer (CEO) at Bottomline Technologies, said: "Bringing together these three businesses creates a truly global financial messaging business with the expertise, resources and scale to help customers around the world optimise their financial transactions."
The takeover of Sterci and Simplex by Bottomline is a sign that the financial messaging technolgoy arena is continuing to consolidate and large firms such as Bottomline are snapping up smaller rivals to expand their technology suite away from just payments into wider transaction and reporting services. This trend gives bank, corporate and other customers more rich data that can be used to track and monitor payments by treasuries and others and enables economies-of-scale savings to be made.
For smaller operators, such as Sterci, it means greater access to wider markets and client bases and more budget to re-invest in the next generation of new messaging technologies. Bottomline is also gaining extra geographical reach and enlarging itself to become a truly global and big player in the transactional arena.
The deal will also lock-in more users to Bottomline's payments processing and other transactional processes, potenitally making it more difficult for Swift to directly attract corporate clients itself via its Alliance Lite 2 technology platform which launhed last year with the express aim of gaining direct connection corporate customers.
According to Enrico Camerinelli, a senior analyst for the Aite Group consulancy, the deal expands Bottomline's ability to reach out to both bank and corporate customers and enhances its supply chain finance capabilities. "This positions Bottomline as a serious partner for treasury management system (TMS) vendors in future that wish to help their clients extend their reach beyond the four walls of their corporation.
"It also means Bottomline is now a serious contender in the TMS arena for a possible [later] acquisiton of a local treasury system vendor."
By Tony Aynsley and Neil Ainger