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SimCorp receives takeover offer

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SimCorp A/S (SimCorp or the Company) and Deutsche Börse AG (Deutsche Börse or the Offeror) have today entered into an announcement agreement (the Announcement Agreement) pursuant to which Deutsche Börse will make an all-cash voluntary recommended public takeover offer to acquire all of the issued and outstanding shares (except treasury shares) in SimCorp (the Offer). Deutsche Börse is a German stock corporation (in German: "Aktiengesellschaft") under registration number HRB 32232 with the registry court (in German: "Amtsgericht") Frankfurt/Main. The shares in Deutsche Börse are admitted to trading on the regulated market of the Frankfurt Stock Exchange (in German: "Frankfurter Wertpapierbörse").

Highlights of the Offer

  • The price of the Offer is DKK 735.0 in cash for each share of nominally DKK 1.0 in SimCorp (the Offer Price), subject to adjustment on a DKK-for-DKK basis for any dividends or other distributions paid out to shareholders prior to completion of the Offer, valuing the entire share capital of SimCorp at approximately DKK 29.0 billion.
  • The Offer Price of DKK 735.0 represents:
    • a premium of 38.9% compared to the closing share price of DKK 529.0 on Nasdaq Copenhagen on 26 April 2023, being the last trading date prior to this announcement
    • a premium of 45.3% compared to the three-month volume weighted average share price of DKK 505.7 for the period of 26 January 2023 to 26 April 2023
    • a multiple of 29x 2022 IFRS adjusted EBIT, based on 2022 IFRS adjusted EBIT (excl. special items) of EUR 135.7 million
  • The Board of Directors of SimCorp has unanimously decided that it intends, in the statement to be issued in accordance with section 22 of the Danish Executive Order on Takeover Offers following Deutsche Börse's publication of the offer document pertaining to the Offer, to recommend that the shareholders of SimCorp accept the Offer. The Board of Directors' decision is supported by a fairness opinion issued to the Board of Directors by Credit Suisse, acting as financial adviser to SimCorp in connection with the Offer.
  • Members of SimCorp's Executive Management Board and Board of Directors have irrevocably undertaken to accept the Offer or otherwise sell their Shares to the Offeror at the Offer Price and on the terms and conditions applicable to the Offer, subject to certain customary conditions and any restrictions applicable under SimCorp's Remuneration Policy or SimCorp's existing incentive program.
  • The Offer will be made subject to a number of conditions, including a requirement that the Offeror at the expiry of the offer period owns or has received valid acceptances with respect to shares representing at least fifty percent (50.0%) of the voting rights and share capital of SimCorp plus 1 share, that necessary approvals and clearances by relevant regulatory authorities are obtained, that the Board of Directors has not withdrawn or adversely amended its recommendation to the shareholders to accept the Offer, the non-occurence of certain material adverse changes, and certain other customary conditions.
     
  • The Offeror will, as soon as possible and no later than four weeks from today, publish an offer document approved by the Danish Financial Supervisory Authority with detailed information about the Offer. The offer period is expected to be approximately seven weeks from announcement of the offer document, subject to any extension of the offer period by the Offeror in accordance with the terms and conditions of the Offer.
     
  • The consideration in the Offer will be paid in cash at completion.
     
  • Deutsche Börse expects completion of the Offer in Q3 2023.


Peter Schütze, Chair of the Board of Directors of SimCorp, said: "The Board of Directors finds that the Offer from Deutsche Börse represents attractive value for SimCorp’s shareholders as the Company accelerates its transformation to a full-scale SaaS and BPaaS provider to deliver sustained long-term profitable growth. Deutsche Börse is well-positioned to contribute to the realization of SimCorp’s long-term potential, and the Offer is a clear testament to the strong position and prospects of SimCorp in a global investment industry undergoing fundamental changes and seeing rising demand for integrated technology platforms. In considering the Offer, the Board of Directors also appreciated that Deutsche Börse finds our competent and skilled employees to be crucial to SimCorp’s continued success. Following several rounds of intense negotiations, where we managed to increase the offer price meaningfully and improve other terms and conditions of the Offer for our shareholders, the Board of Directors has unanimously agreed that it intends to recommend our shareholders to accept the Offer when it is formally submitted on the agreed terms and conditions."

Background and Reasons for the Offer

Deutsche Börse is an international exchange organisation and market infrastructure provider. With its wide range of products, services and technologies, Deutsche Börse aims to ensure capital markets characterized by integrity, transparency, and stability and to organize safe and efficient markets for sustainable economies. Deutsche Börse's business areas cover the entire financial market transaction process chain and includes provision of indices, data and analytical solutions as well as admission, trading, and clearing. Additionally, it comprises services for funds, the settlement and custody of financial instruments as well as the management of collateral and liquidity. With more than 10,000 employees, the Deutsche Börse group has its headquarters in the financial center of Frankfurt/Rhine-Main, as well as presence at 38 other locations such as Luxembourg, Prague, London, New York, Chicago, Hong Kong, Singapore, Beijing, Tokyo and Sydney.

Deutsche Börse has followed SimCorp's development and result delivery over several years, and the Deutsche Börse group's business unit Quartz entered into a partnership with SimCorp in 2021 to offer SimCorp's clients a fully managed portfolio optimization and risk management and modelling service within SimCorp's product 'SimCorp Dimension'. Deutsche Börse has expressed its firm belief that SimCorp will be well-positioned and significantly benefit from becoming part of the Deutsche Börse group as an independent leading front-to-back investment management solutions platform providing state-of-the-art investment management SaaS (Software-as-a-Service) and BPaaS (Business-Process-as-a-Service) solutions at scale. Deutsche Börse believes that SimCorp and the Deutsche Börse group together will be able to create significant value for clients, employees, and all other stakeholders involved.

Deutsche Börse agrees with the strategy that has been set out and pursued by the Board of Directors and the management of SimCorp. Deutsche Börse intends to support the management team and invest further in innovations with a view to strengthen SimCorp’s ability to transform its business model to become a leading SaaS and BPaaS player for global asset owners, asset managers, and asset servicers, operating as an open platform delivering flexibility and operational efficiency under the brand name of SimCorp. Deutsche Börse views the management and employees of SimCorp as a key cornerstone for future success and has stated its intentions to preserve SimCorp’s current global operational presence, including maintaining the headquarters of the SimCorp group in Denmark.

The Board of Directors' Recommendation
Taking into consideration the value creation offered to the SimCorp shareholders, the other terms of the Offer agreed as well as certain undertakings and commitments made by Deutsche Börse in the Announcement Agreement, the Board of Directors has unanimously confirmed that it intends to recommend the shareholders of SimCorp to accept the Offer, when made in the form of an offer document approved by the Danish Financial Supervisory Authority. The Board of Directors will in accordance with Section 22 of the Danish Executive Order on Takeover Offers (in Danish: "bekendtgørelse nr. 636 af 15. maj 2020 om overtagelsestilbud") publish a statement in respect of the Offer upon publication of the offer document, which will include the Board of Directors' considered statement on the Offer.

To support its assessment of the financial merits of the Offer, the Board of Directors has received a fairness opinion dated 27 April 2023 from SimCorp's financial advisor, Credit Suisse, confirming that, as of such date and based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken, and other matters considered by Credit Suisse in preparing its opinion, the Offer Price to be received by the shareholders of SimCorp is, from a financial point of view, fair to the shareholders of SimCorp.

Conditions to Completion

The Offer will be made subject to a number of conditions, including a requirement that the Offeror at the expiry of the Offer period owns or has received valid acceptances with respect to Shares representing at least fifty percent (50.0%) of the voting rights and share capital of SimCorp plus 1 share, that necessary approvals by relevant regulatory authorities are obtained, that the Board of Directors has not withdrawn or adversely amended its recommendation to the shareholders to accept the Offer, the non-occurence of certain material adverse changes, and certain other customary conditions.

According to Deutsche Börse's assessment, completion of the Offer will require customary merger control approval in the European Union, approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in the United States and foreign direct investment approval in a limited number of EU jurisdictions. Deutsche Börse has initiated the work on filings relevant for the Offer.

Deutsche Börse has in the Announcement Agreement made certain undertakings and commitments to SimCorp for the purpose of ensuring that the regulatory conditions are fulfilled. Similarly, SimCorp has made certain undertakings and commitments to support Deutsche Börse in its pursuance of satisfying such conditions and otherwise in respect of the Offer. Neither SimCorp nor Deutsche Börse will be obliged to pay any "break-fees" or penalties if the conditions to completion of the Offer are not satisfied and the Offer is not completed.

Offer Process and Terms

The announcement of the Offeror's decision to make the Offer is attached.

The Offer will be conducted in accordance with Danish law and the terms and conditions of the Offer will be set out in an offer document, which will be published by the Offeror upon approval by the Danish Financial Supervisory Authority no later than four weeks from the date of this announcement.

The Offer is expected to be made in the U.S. in compliance with Section 14(e) of, and applicable provisions of Regulation 14E promulgated under, the U.S. Securities Exchange Act of 1934, as amended (the Exchange Act), subject to the "Tier II" exemptions provided by Rule 14d-1(d) under the Exchange Act and otherwise in accordance with the requirements of Danish law. Deutsche Börse also expects to take steps to meet the conditions required for the Offer to be exempt from the requirements of Part 2 of National Instrument 62-104 – Takeover Bids and Issuer Bids under Canadian securities laws.

Once the offer document is published, all shareholders in SimCorp (except shareholders who are resident in certain restricted jurisdictions) will have the possibility to tender their Shares to the Offeror. The offer period is expected to be approximately seven weeks from announcement of the offer document but can be extended, including in order to satisfy the regulatory conditions. No later than three days after expiry of the offer period (as may be extended), the Offeror will publish the final result of the Offer.

Deutsche Börse expects completion of the Offer in Q3 2023.

Advisors

Credit Suisse International is acting as financial advisor to SimCorp. Kromann Reumert is acting as legal advisor to SimCorp on the transaction and Covington & Burling LLP is acting as U.S. legal advisor to SimCorp on the transaction.

Enquiries regarding this announcement should be addressed to

Investor contacts

Michael Bjergby, Chief Financial Officer, SimCorp A/S (+45 3137 4171)
Anders Hjort, VP, Investor Relations, SimCorp A/S (+45 2892 8881)

Media contacts

Tobias Brun-Falkencrone, Head of Branding & Communications, SimCorp A/S (+45 2938 1384)

Company announcement no 7/2023

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