Fundtech helps banks manage their bucks. The company's software facilitates electronic payment processing, financial communications, and cash management for financial entities. Fundtech's applications support such processes as electronic funds transfer, payment initiation, balance reporting, and account reconciliation. Fundtech's products include its PAYplus electronic payment software, CASHplus cash management application, and the web-based ClaritySuite information exchange product. Founded in 1993 Fundtech terminated its 2011 S1 merger plans and was acquired later that year by investment firm GTCR for about $390 million.
As part of the deal, GTCR paid the $11.9 million fee for Fundtech's termination of the S1 deal. The cash deal represents a 33% premium on Fundtech's stock the day before the announcement of GTCR's offer.
Fundtech earns the majority of its revenues from US customers, which account for nearly 45% of sales. Still, that market is the most competitive, with giants such as Fiserv and FIS raking in billions. The company's top three customers overall bring in about 21% of revenues. (The company counts more than 1,000 customers around the world).
Throughout the global recession Fundtech's growth has proven resilient, and the relative quieting in 2010 of the economic tumult amplified the company's string of good fortune, with more than 20% top-line growth and about a 170% jump in its bottom line. The significant contributors to these results were its CASHplus cash management product, Global PAYplus in its payments sector, and IGTplus in the messaging segment.
Product development is a crucial part of Fundtech's competitive edge, with teams in the US (Georgia, New Jersey, Massachusetts, and California), Israel, Switzerland, India, Wales, England, and Germany. This geographic dispersion helps the company better address region-specific needs and maintain a skilled staff.
The focus on transaction banking services remains singular at Fundtech. The company's value proposition within that is in helping banks monetize the data flow within the transactions. It also sees an opportunity to get its customers more involved with interactions between commercial trading partners.
Outside the US, Fundtech has expanded its global trading services. The company's second-largest region, the UK, has grown as a percentage of sales, climbing from 15% in 2008 to nearly 20%. Part of that growth has been due to acquisitions there. Among those additions have been electronic bill presentment software company Accountis Limited, SWIFT service bureau Synergy Financial Systems, and BACS (Bankers Automated Clearing Services) provider InterSoftware. The company paid about $16 million for all three.
Its Swiss subsidiary BBP AG (formerly Biveroni Batschelet Partners AG) is the backbone of its financial messaging segment, offering payment processing and securities transactions for more than 200 banks and financial institutions. BBP controls subsidiaries Datasphere (for French-speaking countries in Europe) and the UK-based Synergy Financial Systems. Switzerland is the company's third-largest market, accounting for 12% of revenues, making it, the UK, and the US more than three quarters of the company's business.