Temenos to acquire Australian partner Rubik for $50m
Temenos will acquire all of Rubik shares via a scheme of arrangement, subject to shareholder approval and other customary conditions.
The acquisition is expected to close by the end of May 2017.
If the scheme is implemented, Temenos will acquire 100% of the issued capital of Rubik for a cash consideration of AU$0.1667 per share, valuing Rubik’s equity at approximately AU$68 million ($50 million) on a fully diluted basis.
This represents a 52% premium to Rubik’s closing price of AU$0.11 on 14 February 2017.
Rubik states its board of directors “has unanimously recommended that its shareholders vote in favour of the scheme, in the absence of a superior proposal, and subject to an independent expert concluding that the scheme is in the best interests of Rubik shareholders”.
The company has appointed Grant Thornton as the independent expert to prepare a report on whether the scheme is in the best interests of Rubik shareholders.
It is understood that Rubik’s three largest shareholders – Viburnum Funds LHC Capital Partners and Regal Funds Management – who collectively hold 44% of the shares on issue of the company, are in favour of the acquisition.
Iain Dunstan, CEO of Rubik, states the acquisition “represents a positive result for all Rubik stakeholders”. He adds that Rubik has “enjoyed a strong partnership with Temenos for a number of years”.
Rubik and Temenos
Rubik’s core banking software offering, Bank-in-a-Box, is based on Temenos’ T24 core banking system. It is offered on a hosted basis to banks and financial institutions in Australia and New Zealand.
The offering was introduced to the market back in 2008 but has just two users to date: Maleny Credit Union (MCU) and Uniting Financial Services (UFS, the treasury arm of Uniting Church).
Last year, the partnership was extended to include Temenos’ omnichannel platform, Temenos Connect. According to the agreement, Rubik’s existing channel offering was upgraded to that of Temenos.
Rubik has gone through a string of senior management changes over the last few years. The company’s founder and CEO, Brent Jackson, left in early 2013.
He was succeeded by Ken Carr, who joined from a small domestic advisory firm, Kilnsey, where he was MD. Carr left Rubik a year and a half into his new post.
The current CEO, Dunstan, is formerly regional director at Avaloq. Prior to that, he was CEO and MD of Bravura Solutions.
UPDATE: The acquisition was closed on 22 May 2017. The transaction is expected to contribute $15 million of non-IFRS revenues and to be non-IFRS EPS neutral for Temenos in 2017, and 3% accretive in 2018.