NEC acquires Swiss fintech company Avaloq for $2.2 bn
06 Oct 2020
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NEC Corporation, a leader in the integration of IT and network technologies, on Monday announced the acquisition of Avaloq Group AG (Avaloq), a leading Swiss financial software company, in a deal worth 2.05 billion ($2.2 billion).
The acquisition of Avaloq will provide NEC with digital finance software and domain knowledge as it enters into the field globally and strengthens its business in the digital government field.
Unlisted Avaloq is Europe’s top provider of financial asset management software. NEC will acquire the stake of Avaloq’s founder and employees and private equity firm Warburg Pincus, which has a 45 per cent stake.
Avaloq, whose customers include Deutsche Bank and HSBC, reported sales of 610 million Swiss francs ($664 million) last year, 70 per cent of which came from Europe, but reaches across more than 150 customers in 30 countries worldwide.
The deal will allow NEC to offer cloud services acquired through the merger combined with its own biometrics and data analysis products to financial institutions and governments as digitalisation gathers pace.
It has spent the last decade restructuring unprofitable units that lost business to price-competitive Asian rivals, selling its semiconductor, personal computer and smartphone units.
In recent years, Avaloq has worked with FinTech startups and other partners to aggressively promote digitisation through AI, blockchain and other technologies as part of capitalising on new service needs brought on by open banking, particularly in Europe.
NEC focuses on Solutions for Society businesses that utilise the strengths of ICT to enhance social infrastructure. NEC's biometric and AI technologies are driving the expansion of business globally, mainly in the digital government field, and help to promote safe, secure, fair, and efficient communities. NEC is now shifting more attention towards SaaS business models that utilize software capable of being horizontally deployed.
“NEC will be placing great importance on building long-term relationships with Avaloq and its customers, and aims to create new solutions that combine Avaloq's software with NEC's cutting-edge technologies, such as its brand of biometric authentication solutions, “Bio-Idiom," the company's AI technology brand, “NEC the WISE," and its innovative blockchain technologies," said Takashi Niino, President and CEO, NEC Corporation.
“The Avaloq team is delighted to be joining the NEC Group, a highly trusted and well-respected company with a long heritage, which will help further enlarge our geographical footprint across the globe," said Juerg Hunziker, CEO of Avaloq.
The acquisition is expected to be completed by April 2021, following the confirmation of necessary procedures and approvals for each organisation, NEC stated in a release.
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