The transaction is expected to be closed by April 2021, subject to certain required procedures and approvals
NEC's Kobe system centre. (Credit: Nkns/Wikipedia.)
Japan-based information technology (IT) firm NEC has agreed to acquire Avaloq, a financial software firm focused on digital banking solutions, for around CHF 2.05bn ($2.18bn).
With the acquisition, NEC is expected to gain digital finance software and domain knowledge and strengthen its business in the digital government field, through SaaS business models that use software and technologies.
The transaction is expected to be closed by April 2021, subject to confirmation of certain required procedures and approvals for both the companies individually.
NEC is focused on solutions for businesses that leverage ICT capabilities, and is now shifting it towards SaaS business models that leverage horizontally deployed software.
NEC president and CEO Takashi Niino said: “NEC will be placing great importance on building long-term relationships with Avaloq and its customers, and aims to create new solutions that combine Avaloq’s software with NEC’s cutting-edge technologies, such as its brand of biometric authentication solutions, “Bio-Idiom,” the company’s AI technology brand, “NEC the WISE,” and its innovative blockchain technologies.
“NEC will also promote global sales expansion of Avaloq’s software by taking advantage of NEC Group sales channels, including KMD, a leading European software and IT services provider that NEC acquired in February 2019.”
Avaloq offers SaaS and BPaaS services for wealth management companies
The financial industry is acquiring new sources of revenue by creating services that use digital technologies, and software, in response to reduced growth in conventional services.
Avaloq is a Switzerland-based software firm, developing digital banking solutions for more than 150 customers in 30 countries around the world.
The company provides software as a service and business process as a service for wealth management and other applications in the Europe and Asia Pacific markets.
Furthermore, Avaloq has partnered with FinTech start-ups and other collaborators in recent years to promote digitisation through AI, blockchain and other technologies.
Avaloq CEO Juerg Hunziker said: “The Avaloq team is delighted to be joining the NEC Group, a highly trusted and well-respected company with a long heritage, which will help further enlarge our geographical footprint across the globe.
“Due to very similar values of professionalism, reliability, quality and excellent service for clients with a focus on precision, we firmly believe that this union will be a successful one for all involved and we are looking forward to an exciting and fruitful cooperation.”