FNZ has completed a second significant buyout in a matter of weeks after winning a drawn-out battle to secure ASX-listed financial software firm, GBST, according to sources familiar with the deal.
It is understood FNZ closed out the GBST purchase last Friday night at A$3.85 per share, equating to a valuation of about A$260 million.
The agreement follows a more than three-month tussle for GBST triggered by a A$2.50 per share offer lobbed by fellow ASX-listed back-office software firm, Bravura, in April.
In securing GBST, FNZ fended off both Bravura and SS&C Technologies after the latter firm initially gained the upper hand under a three-week exclusive due diligence period early in July.
As the SS&C exclusivity neared an end last week, FNZ launched a series of Dutch auction bids for GBST starting at A$4 per share.
On Thursday last week, GBST issued a statement rejecting three FNZ bids with the final offer dropping to A$3.90 at the time.
Allan Brackin, GBST chair, said in the Thursday release that the FNZ offer was “accompanied by unreasonable conditions and did not provide a reasonable period of time for the parties to enter into good faith discussions”.
“Whilst FNZ’s proposals were described as binding, in the GBST Board’s view these were not capable of acceptance within the timeframes imposed by FNZ,” Brackin said. “In forming this view, the GBST Board also noted that it is always open for any party to put forward a proposal directly to shareholders.”
However, by Friday night GBST had signed a scheme of company arrangement with FNZ at A$3.85 per share, according to sources.
Earlier in July FNZ bought UK rival platform provider JHC, which added £160 billion (or NZ$295 billion) in funds under administration (FUA).
GBST will give FNZ a leg-up into the Australian market, where the NZ-originated firm has struggled to build scale. While GBST also has clients in Asia, Europe and North America, the financial software provider has a strong following among superannuation funds and wealth management firms in its home country.
Post the Royal Commission into financial services across the Tasman last year, the Australian investment platform market has also been shaken up with distributors shifting to non-aligned, outsourced transparent systems that could suit the FNZ model.
As well as providing an efficient way to build FUA, GBST also has a stockbroking transaction business that offers further growth opportunities for FNZ in both Australia and NZ.
Last October a consortium of North American private equity funds bought two-thirds of FNZ for about $2.3 billion, valuing the Wellington-founded business at almost $3.5 billion.
Before it entered a trading halt on Friday, GBST shares closed at A$3.70, up from about A$2.50 in mid-June and almost triple the A$1.30 it fetched at the beginning of 2019.