FNZ has splashed out on its second major purchase in less than a year after acquiring the UK-headquartered platform technology firm JHC last week.
In a statement, Adrian Durham, said the deal would “not only consolidate our combined position in the UK market, but to take JHC technology propositions into new strategic territories – such as APAC and continental Europe – and into new product areas.”
JHC has about £160 billion (or NZ$295 billion) in funds under administration (FUA) via three underlying software systems – dubbed Figaro, Xenon and Neon – compared to £380 billion for FNZ. Last week FNZ also finalised its purchase of the German ebase from Comdirect Bank for about £140 million. The ebase agreement, announced a year ago, added about over £30 billion to the FNZ FUA.
However, the JHC deal represented a significant step up in scale for FNZ, which now has the backing of new hefty North American majority private equity owners.
“JHC has a market leading and well-established technology platform in the UK, combined with new state-of-the-art digital solutions,” Durham said in the statement.
While JHC does not yet have any Australasian clients, the group has an exclusive distribution arrangement with Auckland-based MyFiduciary to market its Neon portfolio compliance tool in the region.
John Blackman, JHC chief, said in the release that merging with FNZ was “the perfect way for us to grow our business”.
“It is great news for our clients as FNZ is committed to investing in Figaro, Neon and Xenon and supporting our plans for the future,” Blackman said. “FNZ will support JHC in enhancing and growing our SaaS offerings and gives JHC the opportunity to offer new, broader functionality to our clients.”
FNZ is also embroiled in a heated three-way battle to take out Australian platform software provider GBST. The Edinburgh-based FNZ offered a reported A$3.50 per share (or about A$240 million in total) for GBST last month in a bid to gazump earlier contenders SS&C Technologies and Bravura.
On July 3 SS&C upped its bid to A$3.60 per share under a three-week exclusive due diligence agreement with GBST.
FNZ subsequently applied to the Australian Takeovers Panel (ATP) to block the SS&C exclusivity deal GBST after its revised offer of $3.65 was rejected.
The ATP last week declined the FNZ application, noting that while “the process adopted by GBST was not conventional, it did not consider the process unacceptable”.
“To date, that process had led to significantly increased indicative offer prices to the benefit of GBST’s shareholders,” the ATP ruling says. “The Panel considered that there was nothing that prompted it to second guess the GBST board’s decisions. It noted that there was nothing to prevent third parties submitting a superior proposal to GBST to trigger the fiduciary out.”
GBST has little, if any, exposure in NZ but it has a strong presence in its home base of Australia and in the UK market. If it could snap up GBST, FNZ would further cement its grip on the UK platform market while opening up opportunities in Australia, which has, to date, proved elusive for the NZ-built global fintech star.