ION, the fintech consolidator, and Japanese conglomerateNEC Corp. are among suitors competing for a stake in Swiss banking software providerAvaloq Group AG, people with knowledge of the matter said.
Private equity firmsApax Partners, Motive Partners andNordic Capital have also been invited to proceed to the second round of bidding, according to the people, who asked not to be identified because the information is private. Avaloq’s owners are seeking a valuation of as much as 2 billion Swiss francs ($2.2 billion) in any deal, the people said.
Buyout firm Warburg Pincus, which bought 35% of Avaloq in 2017, has been exploring a potential stake sale since last year, Bloomberg News hasreported. Avaloq Chairman Francisco Fernandez is considering selling a controlling stake in the business alongside Warburg Pincus, the people said.
Technology dealmaking has held up relatively well amid the coronavirus downturn, with $123 billion of transactions announced in Europe since the start of the year, according to data compiled by Bloomberg. No final decisions have been made, and there’s no certainty the suitors will proceed with binding offers, the people said.
Representatives for Apax, Avaloq, NEC, Nordic and Warburg Pincus declined to comment. Representatives for ION and Motive couldn’t immediately be reached for comment.
Avaloq provides software for financial institutions that helps underpin digital banking and wealth management platforms. Its clients includeBarclays Plc,HSBC Holdings Plc andSociete Generale SA, according to itswebsite. Faced with increasing competition fromdisruptive startups, banks and investment managers continue to overhaul legacy computer systems to better cater for customer demand for products to manage money online.
The company’s technology is used to manage about 4.5 trillion Swiss francs of client assets, according to itswebsite. Warburg Pincus’s investment in Avaloq over three years ago valued the business at more than 1 billion Swiss francs, it said at the time.
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— With assistance by Takashi Amano, Viren Vaghela, and Myriam Balezou
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