Mergers and acquisitions is a rough and tumble business with its own high drama. That’s certainly been the case with the recent corporate theater involving the actors Fundtech, S1, private equity firm GTRC, and ACI Worldwide. This article examines what’s next for Fundtech now that the company has walked away from its merger with S1 and into the arms of private equity firm GTRC –outfit that acquired BankServ in August. For the final act in this play, we will have to wait until next month to learn the outcome of the S1 – ACI proxy fight and hostile takeover. In the meantime, Fundtech can rest in the comparative safety of a private owner.
Under a private owner, Fundtech will have opportunities to expand and gain more flexibility than public companies typically enjoy, Fundtech officials say.
The first opportunity is to merge with BankServ, a vendor GTCR bought in August.
“That would be a larger acquisition than Fundtech has made in the last 10 years combined,” says George Ravich, Fundtech’s chief marketing officer and an executive vice president.
Fundtech spends about 20% of its revenue each year on research and development, and it has been limited in its ability to push beyond that, he says.
“A lot of times we’re forced to invest only when we’re able to have a customer make some sort of commitment to what happens on the other end,” Ravich says. Under GTCR, if Fundtech wants “to do something big and important and expensive, this [acquisition] will enable us to do that. … GTCR has a proven track record of nurturing the companies they take private.”