Sources inform ''Globes'' that IDB Holding Corp. Ltd. (TASE:IDBH), controlled by chairman Noch Dankner, is in talks to sell its stake in Fundtech Ltd. (Nasdaq: FNDT; TASE: FNDT). IDB unit Clal Industries and Investments Ltd. (TASE: CII) owns 58.6% of Fundtech, a developer of financial transaction processing software solutions.
Fundtech has a market cap of $262 million, which give's Clal Industries' stake a value of $153 million. The company is reportedly asking $150-180 million for its stake, a premium of up to 18%.
IDB is at the bidding stage between several potential buyers. They are reportedly not private equity funds, but Fundtech competitors; companies seeking to enter the financial services solutions business, or IT services companies. CitiGroup Inc. (NYSE: C) is handling the deal.
Clal Industries gradually consolidated its stake in Fundtech over several years, and it will presumably not sell it without a handsome premium.
Fundtech has been the target of several takeover bids. There were talks for a sale to rival Technical & Scientific Application Inc. (TSA) in 2005, which went nowhere.
As a vendor to the financial industry, Fundtech was hurt by the economic crisis in 2008, but it resumed growth in 2010, and raised its guidance every quarter. The company posted a net profit of $2.4 million in $37.2 million revenue in the first quarter of 2011, and it expects 13% growth this year.
Fundtech's share price rose 1.5% at the opening on Nasdaq today, after rising 2% on the TASE to NIS 59.62.
Published by Globes [online], Israel business news - www.globes-online.com - on June 14, 2011
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