Axway announces the successful completion of the acquisition of Sopra Banking Software, establishing one of France’s top enterprise software publishers, with leading positions in banking and financial services. This major step in the company’s development not only marks a change in dimension, but also initiates a transformative alliance project aimed at delivering substantial value to all its stakeholders.
First announced at the end of February, Axway’s proposed acquisition of Sopra Banking Software was made possible by the successful execution of several critical operations in recent months. With strong support from its shareholders and the addition of new investors, over the summer the company carried out a share capital increase with preferential subscription rights for a gross amount of c.€131m, which it combined with the securing of new credit facilities (c.€200m) from partner banks, in order to finance the acquisition for an enterprise value of €330m.
The completion of Axway’s acquisition of Sopra Banking Software has received the approval of the relevant regulatory authorities and the integration of the two entities is beginning. The latter part of 2024 and into 2025 will be instrumental in the ramp-up of the new Group and will enable the expected cost optimizations to materialize.
The Group will be headed by Patrick Donovan, as CEO, and Eric Bierry, who will take on the role of Deputy CEO.
Patrick Donovan, Chief Executive Officer, said:
” We are at a pivotal moment in our company’s history. The completion of the tie-up between Axway and Sopra Banking Software embodies a unique development opportunity, and the ambitious industrial project we have been working towards can finally come to life. We will be fully committed to this project and I am convinced that, together, our teams will achieve outstanding success. Our brands are strong, our flagship products are recognized among the best in their markets, and our customer-centric business model, refined over several years of transformation, has proven its effectiveness. The operational work begins now, with the unwavering priority for both Axway and Sopra Banking Software remaining, as always, the success of our customers’ projects.”
Eric Bierry, Deputy Chief Executive Officer, added:
” We are incredibly excited to be part of creating a new global powerhouse in enterprise software. Our industry-leading technology platforms and business software have a long and successful track record of driving the transformation of some of the world’s largest banking and financial institutions, and this alliance significantly strengthens our positions, offerings, technologies and perspectives. This operation provides a major opportunity to accelerate our value creation for all our stakeholders through a new Group of critical size with tenfold capabilities. I am particularly pleased that our 5,000 employees, from 26 countries around the world, are seeing our entrepreneurial culture thrive through a project filled with compelling opportunities.”
Targets and Outlook
The consolidation of Sopra Banking Software is effective today and Axway will therefore integrate the acquired activities for the last 4 months of the 2024 financial year. On this basis, the Group is targeting 2024 revenue of around €460m and an operating margin of between 13% and 17%.
By 2025, pursuing its development at an annual organic growth rate of between 2% and 4%, Axway targets revenue of around €700m and a margin on operating activities of between 14% (around €100m) and 16% which will reflect the full materialization of cost optimizations, of the order of €15m, expected on a full-year 2025 basis.
By 2027, Axway ambitions to achieve revenue above €750m and a margin on operating activities of more than 17%. By 2028, the Group is aiming for a margin on operating activities at around 20% of revenue.
At year-end 2024, Axway expects its net debt to EBITDA ratio to exceed 2.5x. By the end of 2025, this ratio should be below 2.0x, and by 2027 it is expected to be below 1.0x.
Financial Calendar
The Group will detail its medium-term strategic plan at a Capital Markets Meeting to be held in Q1 2025, the date of which has yet to be confirmed.
In the meantime, Q3 2024 revenue will be published on Thursday October 24, 2024, before market opening.
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