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Deutsche Börse Makes All-Cash Offer for SimCorp

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Deutsche Börse has made an all-cash offer for SimCorp. It also plans to combine its existing data and analytics subsidiaries Qontigo and ISS (Institutional Shareholder Services) to create an investment management solutions business offering data, index and analytics products, as well as software solutions. SimCorp’s board of directors has confirmed its intention to recommend that the company’s shareholders accept the offer, which subject to regulatory approvals and a minimum acceptance level of 50% plus one share of SimCorp shares, is expected to close in the third quarter of this year.

The transaction builds on a 2021 cooperation between SimCorp and Qontigo, and is expected to expand Deutsche Börse’s addressable market. It was announced on the same day as SimCorp provided a trading update noting accelerating growth momentum in the first quarter of 2023.

SimCorp will become an integral part of Deutsche Börse’s group of companies, although it will continue as an independent investment management solutions platform providing SaaS and BPaaS solutions. By joining forces with the exchange, it is expected that SimCorp will be able to to strengthen its ability to transform its business model and further invest in innovation to become a leading SaaS and BPaaS player for global asset owners, asset managers, and asset servicers. The SimCorp brand will be retained, along with the company’s management, employees, and global operational presence, including its headquarters in Denmark.

In parallel, Deutsche Börse aims to accelerate development of its data and analytics business to drive growth and efficiencies. With global growth equity investor General Atlantic, it intends to combine Qontigo and ISS, with General Atlantic becoming the sole minority shareholder of the combined Qontigo entity. Deutsche Börse and General Atlantic have reached an understanding in principle on the combination aiming to form an 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.

“Over the past couple of years we have enhanced our data and analytics capabilities with a strong strategic focus to further develop within the investment management business,” says Theodor Weimer, CEO of Deutsche Börse. “SimCorp is a perfect fit strategically and culturally. In addition to the SimCorp transaction, we have decided to merge ISS and Qontigo. Both transactions will bring long-term growth, sizeable and tangible synergies, and a significant increase in our recurring revenues.”

Peter Schütze, chair of the board of directors at SimCorp, comments: “The offer is a testament to the strong position and prospects of SimCorp in a global investment industry undergoing fundamental changes and seeing rising demand for integrated technology platforms.”

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