DH Corp. acquiring N.Y.-based business technology firm Fundtech for US$1.25B

TORONTO – DH Corp. (TSX:DH) plans to expand globally through acquisition of New York-based business technology company Fundtech for US$1.25 billion in cash.

Fundtech, which provides payment and other technology solutions to banks and other companies, has some 1,500 employees in 19 offices worldwide serving 1,200 clients.

Chief executive Gerrard Schmid said the acquisition will provide Toronto-based DH, which used to be called Davis + Henderson and was once known mainly for its cheque printing business, with a market-leading software platform with established scale in payment technology.

“It also delivers capabilities that are relevant to our existing customer base in Canada and the U.S., while making D+H more relevant to global financial institutions and large U.S. banks,” Schmid said.

The deal is expected to close, subject to regulatory approval, in the second quarter.

It will be partially funded through a bought-deal financing co-led by CIBC (TSX:CM), RBC Capital Markets (TSX:RY) and Scotiabank (TSX:BNS) expected to raise at least $826.2 million.

The offering will consist of 16.5 million subscription receipts at a price of $37.95 apiece for gross proceeds of $626.2 million and $200 million of five per cent extendible convertible unsecured subordinated debentures.

Underwriters have been granted over-allotment options to purchase up to an additional 2.475 million subscription receipts for possible maximum proceeds of $123.9 million and up to an additional $30-million aggregate principal amount of debentures.

Toronto-based DH, with annual revenues of more than $1 billion, has some 4,000 employees providing financial technology to almost 7,000 banks, specialty lenders, community banks, credit unions and governments.