Private equity firm Warburg Pincus is acquiring a 35% stake in Swiss financial software firm Avaloq.
The deal will see Warburg Pincus pump a reported $300m into the Zurich-based company in what it says is the first step towards a public listing in the coming years.
The transaction values Avaloq in excess of $1bn and will allow the firm to rebalance its shareholding structure.
The SaaS business serves provides banking technology to banks and wealth managers. The company generated $537m in 2016 -up 10% from the year previous.
The firm’s deputy CEO said: “The technology and service market for the financial industry is growing rapidly and I believe that there are tremendous opportunities for further growth of the business.
“I look forward to continuing to drive Avaloq’s international growth. In evaluating potential partners to support us with our growth strategy, we put special emphasis on company culture, and Warburg Pincus perfectly matches the Avaloq values.
“They will enable our team to provide the best possible digital banking technology and innovative services also in the future.”
The deal is expected to close in the second quarter of 2017 and will see Warburg Pincus nominate two new members to Avaloq’s board of directors.
Warburg Pincus’ managing director and head of Europe Daniel Ziberman said: “With its focus on innovation, we believe that Avaloq is uniquely qualified to take advantage of growing demand for cutting edge software and outsourced services in the financial industry.
“We look forward to partnering with Francisco, Jürg and the rest of Avaloq’s talented team as the company enters a new and exciting stage in its international growth path.”
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