The Swiss banking software provider Temenos is in a binding Scheme Implementation Deed to acquire a company in Australia.

Founded in 2007, Rubik is a leading Australia-based and listed financial software company providing banking, wealth management and mortgage broking solutions, primarily in Australia, and also internationally across Asia and the Middle East. The company has more than 150 employees servicing 930 direct clients and 23,000 end-users in 12 countries.

Temenos has a longstanding partnership with Rubik which dates back nearly 10 years. Rubik has successfully used Temenos solutions as the foundation for its Model Bank and digital front end platform.

Complete Vertically Integrated Solution

The combination of Rubik and Temenos will create a market leader that will be able to capitalise on the growth opportunities in the Australian market, according to a joint press release sent on Wednesday. In particular, it will enable Temenos to benefit from increased scale and to accelerate growth across its key target segments including wealth, core banking, and fund administration.

«We are increasingly seeing banks around the globe addressing the structural pressures they are facing through core renovation with digital at the heart of their strategy. By acquiring Rubik, we will be able to provide a complete vertically integrated solution for the Australian banking market, enabling our clients to realise their digital ambitions,» David Arnott, CEO at Temeno, said.

Unanimously Recommended

Temenos will acquire 100 percent of the issued capital of Rubik for a cash consideration of A$ 0.1667 per share, valuing Rubik’s equity at approximately A$68 million ($50 million) on a fully diluted basis, and equivalent to 2.2x FY 2016 recurring revenues.

The Board of Directors of Rubik has unanimously recommended that its shareholders vote in favour of the Scheme, in the absence of a superior proposal and subject to an independent expert concluding that the Scheme is in the best interest of Rubik shareholders. The Scheme consideration will be funded by Temenos’ existing cash and debt facilities.

Recurring Revenues

Rubik generated revenue of A$ 43.3 million for the year ended June 2016, of which over 70 percent is recurring revenues primarily from Software-as-a-Service. The transaction is expected to be non-IFRS EPS neutral for Temenos in 2017 and 3 percent accretive in 2018.