Reports say two suitors looking to snatch up niche company with great growth prospects.
Payments and mobile banking technology company Fundtech confirmed Wednesday that it is in talks to be acquired.
The Jersey City-based company released a statement acknowledging that it was in “preliminary discussions regarding potential transactions.” And although the company said that it is regularly involved such discussions, “one of the transactions currently being discussed is a merger transaction with a company based in the United States of America.”
Fundtech’s statement also said that it had been approached by a multinational corporation expressing its interest. Reports speculate that that company is either Bottomline Technologies or ACI Worldwide. But Christine Barry, research director at Aite Group, said she wouldn’t be surprised if there was a third suitor. “There are a lot of global core vendors that are looking to enter the US market that are looking for a company that has a strong brand here,” she said. It could also be a company that’s looking to build out its corporate banking product line, Ms. Barry added. “Banks are focusing a lot of attention on corporate banking right now,” Ms. Barry said, citing an Aite Group survey that showed corporate banking as the area seeing the most IT investment over the next several years.
Fundtech is also an attractive as an acquisition target because it is a niche player, Ms. Barry said, with much of its focus on a small number of offerings. “Any vendor looking to really expand their capabilities in end-to-end payments or cash management would have a lot to gain from acquiring Fundtech,” she said. The company is seen possessing a leading payments program called PAYPlus and has also been an earlier adopter of mobile corporate banking (see related story here).
Over the past year Fundtech has seen incredible growth. Last month, the company reported a 71 percent increase in first-quarter profits. The growth was from several areas of the company, including software, maintenance and services. Fundtech’s customers include Bank of America, Barclays PLC and HSBC Holdings. It also is has reported solid growth in Europe, including a recent pick of UBI Banca International of Luxembourg, which will use Fundtech’s SEPA payment offerings.
Fundtech officials would not comment further on any potential acquisition.