Davis + Henderson in Toronto has agreed to buy global payments solutions firm Fundtech.
D+H will pay nearly $1.3 billion in cash for Fundtech, which is based in New York. The acquisition feeds into D+H's long-term growth strategy and previous deals, including its 2013 purchase of Harland Financial. D+H and Fundtech have a combined 8,000 clients.
D+H will buy Fundtech from Chicago private equity firm GCTR, which bought the firm in 2011. Fundtech has 1,500 employees and 19 offices.
The acquisition "will allow D+H to further strengthen our value proposition with relevant technology solutions that appeal to our existing clients and provide us with access to new markets and geographies," D+H Chief Executive Gerrard Schmid said in a press release March 30. The combined company "will have global scale, a comprehensive portfolio of innovative technology solutions and capabilities to continue to execute on D+H's transformation as a global fintech player."
The deal also expands D+H's reach in Europe, Africa, Asia and the Pacific region. Following the acquisition expected to close later this year D+H will have pro forma adjusted 2014 revenues of $1.3 billion.
Additionally, D+H will gain Fundtech's software platform and offerings such as global and domestic payments solutions, financial messaging and merchant services. D+H said those products will complement its existing lending, payments and integrated core platforms.
To fund the deal, D+H plans to raise more than $650 million by selling subscription receipts and issuing convertible debt. D+H also received a commitment letter from the Bank of Nova Scotia, Royal Bank of Canada and Canadian Imperial Bank of Commerce for secured credit facilities of nearly $593 million.