Japan’s NEC agrees to purchase Switzerland’s largest software provider Avaloq to banks for SFr2.05bn ($2.2bn).
The purchase is NEC’s biggest raid into the worldwide fintech space as per the Financial Times reports. However, the deal is expected to be completed by April 2021 after finishing the vital procedures and approvals.
Formerly knows as Nippon Electric Company, NEC was found in 1899 in Tokyo, Japan. NEC provides IT and network solutions to business ventures, communications services providers, and government organizations. This also includes cloud computing, AI, IoT stage, and 5G network products.
Moreover, NEC has been the most outstanding PC seller in Japan since the 1980s, when it dispatched the PC-8000 series.
Avaloq was established in Zurich in 1985, under the name “BZ Informatik Aktiengesellschaft,” working as the IT subsidiary of BZ Bank.
Nonetheless, Avaloq is currently a developer and provider for core banking. More than 140 banks globally use their software system, Avaloq Banking Suite.
They have around 2,500 staff, 500 of which are programmers. The banking group generates over $500 million in annual revenue. And it’s software accounts for bank deposits to the sum of around $4 trillion.
On Monday, Japan’s NEC Corp said it would buy Swiss financial software company Avaloq Group AG.
NEC will obtain unlisted Avaloq, Europe’s top supplier of monetary resource management software. Avaloq’s founder Francisco Fernández and workers and the private value firm Warburg Pincus, which has a 45% stake and designed the deal.
Avaloq’s customers include Deutsche Bank and HSBC. They reported sales of $664 million last year, 70% of which came from Europe.
The deal will permit NEC to offer cloud services obtained through the merger joined with its biometrics and data analysis items to financial institutions and governments.
Further, the deal follows NEC’s 2018 purchase of British IT services organization Northgate Public Services. Their clients include London’s Metropolitan Police. Furthermore, NEC’s 2019 acquisition of Danish e-government organizations firms KMD for more than $1 billion.
Avaloq’s founder Francisco Fernández said in a statement that NEC “shares his ambition” for Avaloq. The ambition, however, is to continue to mold the future of the financial industry by continuing to invest densely in R&D.
NEC held around 400 billion yen ($3.8 billion) in cash and cash equivalents at the end of June.
NEC’s chief executive Takashi Niino said in an online news conference that his company prepared to use its blockchain and facial recognition technologies to deliver the privacy and security needs of Avaloq’s customers.
Mr. Niino also expects a “long-term growth” in the market. Nonetheless, we can expect the deal to complete by April 2021 after necessary procedures and approvals.
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