Axway Acquires Sopra Banking Software for €330m

French software firm Axway has completed its acquisition of Sopra Banking Software, effectively creating a new enterprise software powerhouse.

The €330m (US$360m) deal comes amidst a wave of consolidation in the fintech sector, as companies seek to achieve scale and expand their product offerings. It marks a significant milestone in Axwway’s growth strategy and establishes the combined entity as a leading force in the industry.

Is fintech M&A on the rise? 

As interest rates stabilise and valuations become more attractive, larger players are seizing opportunities to consolidate their market positions. 

Axway's acquisition reflects this wider trend. The company has set ambitious targets for the newly formed entity, aiming to achieve revenues of approximately €700m (US$763m) and profits on operating activities of around €100m (US$109m) by 2025. This represents a significant leap from Axway's pre-acquisition position and underscores the transformative nature of the deal.

Patrick Donovan, CEO of Axway, says: “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.”

Synergising Axway and Sopra Banking Software 

The integration of Sopra Banking Software into Axway's operations is expected to yield substantial synergies. 

The combined entity will benefit from a diversified product portfolio that spans multiple geographies, client segments and industries. This diversification is particularly valuable in the current economic climate, where exposure to various market segments can help mitigate risks associated with sector-specific downturns.

One of the key strengths of the new organisation lies in its enhanced position within the banking and financial services sector. 

Sopra Banking Software brings to the table a strong reputation and established client base in this domain, complementing Axway's existing capabilities in API management and B2B integration.

Eric Bierry, who will assume the role of Deputy CEO in the new structure, highlights the potential for accelerated growth and innovation. 

“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,” he says. 

“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.”

The financing of the acquisition was achieved through a combination of a share capital increase and new credit facilities. 

Axway raised approximately €131m (US$143m) through a share capital increase with preferential subscription rights, demonstrating strong support from existing shareholders and attracting new investors. 

Additionally, the company secured around €200m (US$218m) in new credit facilities from partner banks.

The integration process will be crucial for the new entity to achieve its 2025 goals. Axway expects to achieve cost optimisations of around €15m (US$16.4 million) on a full-year basis by 2025. 

However, the company acknowledges that the latter part of 2024 and early 2025 will be instrumental in ramping up operations and materialising these expected efficiencies.

Patrick Donovan concludes: “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 recognised among the best in their markets, and our customer-centric business model, refined over several years of transformation, has proven its effectiveness.”

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