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Co-founder Francisco Fernández sells Avaloq to Japan, and he can still stick with the banking software specialist. That’s not the only win you have on the deal, like finews.ch lists.
1. A lot of money for the founder
It is a proud price that Avaloq is now selling as a whole. As much as finews.ch reported on (today) Monday, Japanese software group NEC pays a total of 2.05 billion Swiss francs for 100 percent of the largest Swiss banking software company. The 57-year-old president and co-founder benefits from this Francisco Fernandez not too close. The last time he held 28 per cent of the company, which means that his stake in the company is now worth around 574 million francs.
A lot of money, especially considering that Fernández already sold his own shares to American financial investor Warburg Pincus in early 2017 when he bought Avaloq for around 350 million francs.
2. Found the company of your dreams
For Fernández, the deal doesn’t just bring in a lot of money. With the Japanese NEC Corporation, the Swiss company has also found a dream buyer. Because Fernández always had in mind solidarity with a technology company. In the past, you would have loved to partner with American tech giants Apple or Google.
The fact that he never got there is due to the fact that Fernandez, despite all his visions and dreams, remained at heart the sober computer scientist, in contrast to the quirky tech geeks of Silicon Valley. With his mentality, Fernandez is ultimately better off with the Japanese.
3. Escape the stalemate with Warburg Pincus
When we joined in 2017, new US shareholder Warburg Pincus and Avaloq’s management painted an optimistic picture of the future. Equipped with fresh funds, they wanted to boost business in markets like the United States and Asia; in the medium term, an initial public offering was on the agenda. The relationship cooled when the IT banking specialist’s reversal of course did not bear fruit and growth remained weak; In the end there was a stalemate between the investor and Fernández, which apparently could only be overcome by selling Avaloq.
That transaction is now a fact. Warburg Pincus says goodbye, while Fernández himself continues in the race at Avaloq. Now your hands are free again, at least for the moment.
4. With a long strap?
Fernández’s future role at Avaloq has yet to be defined. However, the Japanese, who are venturing into fintech territory for the first time with the purchase, are not likely to give up on the services and network of the Swiss. Therefore, it should remain, at least in appearance, the face of the banking provider. Meanwhile, Japan is geographically and culturally far from Avaloq’s headquarters in Zurich. A less exotic financial buyer or investor would have had a stricter regime than NEC is likely to have.
5. Safe work
Will there be a relocation of European financial centers due to Corona and Brexit?
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Yes, London will lose much of its importance.
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Yes, Frankfurt will emerge as the big winner.
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There is a division between different cities.
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Yes, Switzerland will become significantly more important.
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No, everything remains the same.
