With today's deliberation, CAD IT, leader in the Italian financial software market, has acquired a further 40% share in the capital of Software Financiero Bolsa (SFB) (www.sfb.es), continuing its policy to expand into the European market and especially in Spain. The transaction will be completed over the next few weeks.
In April 2016, CAD IT acquired 30% of SFB capital with the option, after the closure of the 2018 financial period, to acquire further shares in the holding in order to reach a controlling 51% share or up to 100% of the capital depending on the faculty of SFB partners to exercise a PUT for their remaining share equal to 49%. In virtue of SFB's promising results during the last two years, CAD IT has decided to bring the transaction forward to 2018.
The company ISATIS INVERSIONES, controlled by Luis Mariano Poblador Cumplido, founding partner and current President and Managing Director of SFB, who will keep 30%, has reserved a PUT option to sell CAD IT his entire remaining share within a pre-determined timeframe: within the end of next October, at the close of one of the next three financial periods or in the case of extraordinary transactions having an impact on SFB. In the first case the share price would be the same as that of today's approved transaction; in the other cases the price would be determined according to the value of SFB given by the sum (i) of the average EBITDA over the last three closed financial periods, multiplied by 5, and (ii) of the difference between "Current Assets" and "Current Liabilities" at a pre-established date, net of Euro 800,000 and, except in the case of extraordinary transactions, net of any dividends paid during the time between the shareholders' meeting that approved the last financial report and said PUT option completion.
Founded in 1994 and with registered offices in Madrid, SFB, with about 40 financial institution customers, is leader in Spain for the supply of front, middle and back-office software through which settlement instructions amounting to more than 60% of trading volumes negotiated on the Madrid Stock Exchange are processed daily.
SFB closed its 2017 financial period with revenues of Euro 4.3 million and a net profit of Euro 0.6 million. The net financial position at 31st March 2018 came to Euro 2.3 million.
The amount that CAD IT will pay for acquiring 40% of SFB capital and for the final payment of the 30% share acquired in April 2016 comes to Euro 4.86 million. The investment will be upheld by suitable multi-year bank funding.
With this transaction, CAD IT will be strengthening its presence in the European financial software segment, thereby confirming its strong interest in developing the Spanish market by being able to offer, through the SFB Group and Desarrollo de Productos Informáticos SA (DPI), its own highly innovative products, already well-established on the domestic market and used by 90% of Italian banks as well as other customers in Spain, Switzerland, Germany and England.
The agreement offers CAD IT significant opportunities for increasing revenues due to:
Paolo Dal Cortivo, President and Managing director of CAD IT, as well as Board Member for SFB and DPI, said: “This transaction, together with the one we concluded with DPI last April, increases CAD IT Group's chances of penetrating the Spanish market. In the last two years, SFB has confirmed its professionalism, seriousness, reliability and quality in developing products that are totally in line with CAD IT Group's mission".
Luis Mariano Poblador Cumplido, President and Managing Director of SFB, said: “This alliance with CAD IT offers a magnificent opportunity to increase the IT solution portfolio that SFB and CAD IT, together with DPI, will be able to offer the financial sector in Spain, Portugal, Andorra and, later, Latin America. CAD IT's experience in some technological and regulatory topics will bring enormous added value to our expansion strategy.”
CAD IT was assisted in the transaction by lawyer José Ruiz-Cámara Bayo from MPA Legal in Madrid.
The CAD IT Board of Directors, meeting today, having read the report issued by PricewaterhouseCoopers S.p.A. on 12th June 2018 and having, in any case, received confirmation from its own advisor, Deloitte Financial Advisory, regarding the reasonableness of the substantial conclusion to which Deloitte Financial Advisory came in the context of the analysis and assessments it carried out and endorsed by the Company in order to prepare the merger documentation, has decided to suspend the merger procedure to incorporate CAD IT into the controlling company Quarantacinque S.p.A., in order to make further technical investigations, even with the aid of an independent advisor. Therefore, also in consideration of the convenience to inform the shareholders with adequate notice about the conclusions of the afore-mentioned investigations, the single convocation of the extraordinary CAD IT shareholders' meeting, scheduled for 13th July 2018 at 9.30 am, has been cancelled.