Canadian firm D+H to acquire Fundtech

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Canadian financial technology firm D+H will acquire global payment services provider Fundtech in a $1.25 billion cash deal.

NY-based Fundtech provides transaction banking software that enables global and domestic payments. Its services also include financial messaging, corporate cash management and merchant services.

D+H hopes to expand its service offerings aimed at global financial institutions and large U.S. banks. The acquisition will deepen its US customer base and broaden its prospects in North America. The Canadian company will now service eight of the world’s top 10 banks, 32 of the top 50, and 190 of the top 300.

D+H acquired US rival Harland Financial Solutions for about $1.2 billion from Harland Clarke Holdings a year ago, in a bid to broaden the company’s mobile and online banking offerings, branch automation and commercial lending, primarily around community banks and credit unions.

The offer, which is being co-led by CIBC, RBC Capital Markets and Scotiabank , is still subject to regulatory approval, and the deal is expected to close in the second quarter of the fiscal year, Reuters reported.

“Payments are massively important to banks these days and Fundtech is a market leader in payment hubs,” said D+H Chief Executive Gerrard Schmid told Reuters. The deal will give Schmid’s company “scale in a technology area that is currently very relevant for banks as payment systems are evolving rapidly,” the Reuters report added, with Schmid seeing the deal boosting D+H’s earnings within the first 12 months after the deal closes.

D+H will focus on organic growth and reducing debt over the next 18 months, so will be unlikely to pursue any further acquisitions in the near future, Schmid added.

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