Technology acquisition: Bottomline to be acquired by Thoma Bravo
Bottomline Technologies, a leading financial technology provider that makes complex business payments easy, intelligent and secure, today announced a final agreement for acquisition by leading software investment firm, Thoma Bravo, in an all-cash transaction worth about USD $2.6 billion. Bottomline will convert to a privately held company once the transaction is completed.
Based on the agreement, Bottomline shareholders will get $57.00 per share in cash, which is a premium of about 42% to Bottomline’s stock closing price on October 19, 2021. This was the last day the stock traded before the announcement of the Bottomline Board of Directors’ Strategy Committee and a premium of about 41% to Bottomline’s 30-day volume weighted average price as of October 19, 2021.
Rob Eberle, CEO of Bottomline, commented that they have been working towards a strategy of building a portfolio that provides a competitive advantage that should transform business payments for all parties around the globe. Their partnership with Thoma Bravo will offer extra resources and improved elasticity to invest in innovation and speed to market energies to provide customers with improved value. Moreover, this transaction will provide Bottomline benefits in operations, financial support, and industry knowledge of a successful software and fintech company.
Given the solid track record of investing in the technology industry and deep appreciation for Bottomline's talent, products, and future growth opportunities, Thoma Bravo will be an ideal partner for Bottomline, commented Joe Mullen, Chairman of the board, Bottomline. Furthermore, the Bottomline board of directors frequently evaluates opportunities to increase shareholder value. Mullen further added that Bottomline is confident that the partnership with Thoma Bravo will provide a significant opportunity to bring immediate and secure cash value at a meaningful premium to Bottomline shareholders and substantial long-term benefits for customers, channel partners and employees.
Businesses continue to accelerate in the world of digital transformation, and Holden Spaht, Managing Partner, Thoma Bravo commented that Bottomline will continue to hold its unique position, especially in the large and growing B2B payments market, with a diverse product portfolio that intelligently digitizes payments. Spaht further added that Bottomline is well-positioned in a stimulating and dynamic market, and by leveraging Thoma Bravo’s operational and investment expertise in software and financial technology, Bottomline will be supported into the next growth phase. Brian Jaffee, Principal, Thoma Bravo, concurred that working with Bottomline’s experienced management team will continue to build a solid record of steady innovation, growth and customer satisfaction.
According to the press release, the specific details of the transaction are as follows: “Thoma Bravo has entered into voting agreements with Bottomline Directors (including Chief Executive Officer) and Clearfield Capital Management. Under these agreements, which represent approximately 4% of Bottomline's outstanding shares, the applicable shareholders have agreed to vote in favor of the transaction, and against any competitive transaction, subject to certain terms and conditions. The transaction, which was unanimously approved by the Bottomline Board of Directors, is expected to close in the second calendar quarter of 2022 subject to customary closing conditions, including approval by Bottomline shareholders, receipt of approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and approval from the Financial Conduct Authority in the United Kingdom. Upon completion of the transaction, Bottomline’s common stock will no longer be listed on any public market.”
Artificial Intelligence advancements prominent in UK
Deep Knowledge Analytics, Big Innovation Centre, and Innovation Eye released a comprehensive report, Artificial Intelligence in the UK: Industry landscape overview in 2021, providing details on profiles, classification, and analysis of more than 3,600 private and public institutions from 20 sectors and 50 locations in England (graphic illustration below by Deep Knowledge Analytics, Big Innovation Centre, Innovation Eye, APPG).
The UK leads Europe and ranked third in the world in the areas of advanced artificial intelligence (AI) systems, machine learning development and use, computer vision, chatbots and AI assistants, robotics, internet-of-things, predictive analytics, search engines and language processing, and intelligent data analytics. The UK continues to be Europe’s centre for sectors in finance, marketing and advertisement. London continues to be the most lucrative city for investment and talent according to reports by All-Party Parliament Group on Artificial Intelligence (APPG).
Dmitry Kaminskiy, Founder of Deep Knowledge Analytics and Co-founder of Innovation Eye, further commented that London has 1,300 AI companies that make up 65% of the UK's entire ecosystem of AI industries. Joint efforts from the universities and government on AI preparation, skills, ethics and policy-making research are of great importance for the sectors to further advance in 2022.
Open-access reports and IT platforms cover the latest developments in technology and innovation, leading corporate and investor centres, AI and COVID 19, politics and ethics. Furthermore, the report includes AI challenges and opportunities for the UK along with its top 100 AI experts and hubs (think tanks, tech hubs, doctoral training centres).
The UK remains number one in Europe and the third largest in the world in AI technology development after the United States and China, with industry investment growth of £ 9 billion reported between 2019 and 2021. The UK government continues to drive growth and industry development through five key initiatives: human capital, lab-to-market development, networking, regulation and infrastructure.
The 2021 analysis and report cover more than 2000 AI-centric UK enterprises in 20 AI sectors and 50 cities. In particular, the UK AI Landscape 2021 overview analyses the investment made by 1,500 investors into these AI companies, worth more than £ 13 billion on a corporate-by-corporate basis. The publication also includes several interactive charts by industry, technology, influencers and data visualization, enabling more accurate and dynamic personalized analysis of the project's key conclusions.
Cloud-based digital banking (KYC, AML, IdP) innovations: Neofy and IDmission partnership
Revitalization in the fintech (financial technology) industry continues to increase with neobanks and their new and advanced technology along with unique business strategies. A neobank, sometimes referred to as the “challenger bank," is a fintech company that provides financial services only digitally via computer or through mobile apps, without the traditional brick-and-mortar branch network.
In recent years, customers have become more and more familiar with the use of technology platforms, and their preference for banks has shifted to a more convenient and easily accessible digital experience. This change has revealed a gap between what traditional banks offer and what their consumers expect. Neobanks are ready to fill this niche market by leveraging cutting-edge technology that contributes to more dynamic customer service.
Nonetheless, the establishment of neobanks is challenging, costly and time-consuming. In addition, building a regulatory and operational neobank typically requires an upfront investment of USD $15 to $20 million and requires a minimum of 18 months. Neobanks need to face these challenges in order to be able to effectively compete with established providers.
Neofy, a digital financial cloud provider, provides financial providers with cutting edge digital banking technology services to serve their customer’s operations in an efficient, secure and cost-effective method. Neofy offers a captivating financial services cloud solution that enables banks and fintech companies to evolve with the pay-as-you-go software-as-a-service (SaaS) model.
Global technology partnerships have enabled Neofy to provide all the functional systems needed to develop a bank or fintech in one complete implementation, including everything from core banking systems to card management systems. All of these components are pre-integrated and pre-configured, which not only offers cost benefits, but also reduces time-to-market to less than three months.
Neofy chose IDmission, a global leader in biometric and AI technology, as the Know Your Customer (KYC), Anti-Money Laundering (AML), and identity provider (IdP) to provide clients with smooth transaction experiences based on the state-of-the-art biometrics verification system.
AI and machine vision-based innovation are at the core of Neofy’s service offerings to customers, according to Puneet Gupta, CTO & Co-founder, Neofy. Additionally, IDmission is a significant part of the solution package to automate onboarding and provide the latest security solutions in the smoothest possible way.
Ashim Banerjee, CEO, IDmission, commented that Neofy and other banking-as-a-service providers need the flexibility to create client experiences over the life of the customer identity cycle. With IDmission’s AI-driven multimodal biometric platform, financial providers can feel at ease with KYC parameters built in with the pre-integrated global AML and other regulatory tracking methodologies.
Tinkoff and Finastra partner for entry into the Philippines market
Tinkoff, one of the largest global digital banks with more than 18.5 million customers (www.tinkoffgroup.com/), has selected Finastra's core banking solution, Fusion Essence Cloud, to drive its planned expansion into the Philippines. Finastra's next-generation cloud native system enables Tinkoff to quickly bring powerful new products to market and support rapid customer attainment while complying with local regulations.
George Chesakov, International Lead, Tinkoff, commented on the importance of finding a partner with the right capabilities that could start quickly, enable rapid growth and meet local demands in new markets such as the new expansion into the Philippines. With Finastra's cloud-native and open platform, Chesakov added that they meet all these requirements and are ready to embark in an innovative client experience in the Philippines.
Finastra’s Fusion Essence Cloud is a fully digital, end-to-end core banking system for all major banking services. Tinkoff can integrate the technology solutions from many developers and build systems to meet their specific needs using the extensive catalogue of open APIs and integration with Finastra's app marketplace and developer platform, FusionFabric.cloud. This all-inclusive SaaS platform includes upgrades, security, continuous framework monitoring, incident administration and disaster recovery services, enabling Tinkoff to focus on business goals and strategies.
The Microsoft Azure Southeast Asia Region (Singapore Data Centre) will launch Fusion Essence Cloud to enable optimized processing of very high volumes of data messages with minimal delay and data residency indicating the physical or geographic location of an organization's data or information. Utilizing this cloud solution, Tinkoff will benefit from low market entry costs, simple and fast deployment, the ability to increase business volume, and diversification of its product set at low cost.
Narendra Modi, Chief Product Officer, Retail International Universal Banking, Finastra, commented that Finastra’s open platform concept, deep understanding of Asia-Pacific’s (APAC) retail banking landscape, and proven ability to bring new digital banks to market on time and on budget aligns well with Tinkoff’s shared vision for innovation.
Brazilian open banking goes live
Brazil officially transitions into open banking according to the Central Bank of Brazil. The new phase will show the conversion to open finance by integrating non-banking services. The project will integrate services that go past the basic banking services presented in the second phase, such as account balances and other services related to financial transactions. The last phase of the open banking initiative in Brazil marks the transition to open finance where the individual’s complete financial structure containing data on mortgages, savings, pensions, insurance, loans, etc. can be exposed to trusted third-party APIs upon consumer consent.
Products such as investment products, insurance, foreign exchange and other financial services will be aggregated to the project slowly in the final stages. During the fourth phase, the organizations perform an API certification process relating to the products to be shared to prove that the technology meets the requirements of a central bank. After completing the certification phase, all products introduced in the fourth phase, such as insurance offerings, must be registered in the Open Finance Participants API directory by March 4, 2022. Payments, foreign exchange and investment products will need to complete the registration process in the latter part of the month.
The second segment of Phase 4 will begin on May 31, 2022. The Open Finance Participants will be visible to customers as they can agree to exchange data on available services between participating institutions made accessible through the model.
These newest advances in Brazil's open banking / open finance follow the introduction of Phase 3 in October, which permits the introduction of a new environment for payment transactions and afterward new dynamics for credit operations. This phase was originally scheduled to begin in August, but has been postponed due to technical specification adjustments.
The Central Bank approved Brazil's open banking project in early 2019 as part of the broader modernization agenda of the country's financial system. It was originally planned to be fully deployed by the end of 2021, but the pandemic delayed the project, and the implementation process began in February 2021. According to the revised schedule, the new model will be fully deployed in Brazil by September 2022.
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