DH Corp To Buy Fundtech For US$1.25 Bln.

(RTTNews) - Canadian financial technology company DH Corp (DH.TO) on Monday said it has agreed to buy New York City-based Fundtech, a provider of payments solutions to banks, for US$1.25 billion in cash.

DH expects to close the deal in the second quarter of fiscal 2015, subject to customary conditions.

DH expects the deal to strengthen its position as a key global financial technology provider with a strategic expansion into global payments.

The deal would aid DH to sustain its long-term growth strategy, deepen its U.S. customer base and enhance growth opportunities in North America, EMEA and APAC regions, it said.

Fundtech, a provider of financial technology in the Americas, EMEA, and APAC regions, has about 1,500 employees, and reported 2014 adjusted revenue of US$263 million.

DH said the combination would result in pro forma 2014 adjusted revenues of about $1.45 billion and adjusted net income of $216 million, as well as attractive medium-term synergies and cost savings.

Along with the deal, DH said it has entered into an agreement with a syndicate of underwriters, pursuant to which they have agreed to purchase from DH and sell to the public 16.5 million subscription receipts at a price of $37.95 per receipt, for gross proceeds to DH of $626.18 million, and $200 million of 5.0% extendible convertible unsecured subordinated debentures.

DH said the net proceeds of the offering will be used to fund a part of the Fundtech deal.

Also, DH obtained a commitment letter from the Bank of Nova Scotia, Royal Bank of Canada and Canadian Imperial Bank of Commerce for secured credit facilities totaling about $1.86 billion and US$592.62 million (collectively, the "Credit Facilities"), $550 million and US$267.62 million or the Canadian dollar equivalent which, in aggregate, replace DH's existing revolving credit facility and non-revolving term credit facility, respectively.