NEW YORK – Israel’s Funtech Ltd. announced this morning that Chicago private equity firm GTCR has offered to acquire the company for $23.33 a share, which appears to trump a previous merger agreement with S1 Corp. and end a hostile takeover fight for the Atlanta services provider.
The GTCR deal, which includes an $11.9 million break-up fee, is valued at $363 million, a 33% premium over the Wednesday’s closing price for Fundtech’s shares, and would appear to send S1 into the arms of competing bidder ACI Worldwide. ACI has offered to acquire the back-office service provider for credit unions for $10 a share, but S1 has rejected the bid as inferior to its agreement to merge with Funtech.
Fundtech said last night it considers the GTCR bid superior to the S1 merger agreement and that S1 has five days to renegotiate the deal.
GTCR, formed as Golda, Thoma, Cressey, Rauner, is known for mid-sized deals and has a portfolio of over 200 companies, including Bankserv, the parent of NetDeposit, which it acquired in 2009 from Zions Bank. GTCR is planning to combine Bankserv with Tel Aviv-based Fundtech to create a new entity which will be headquartered in New Jersey.
S1, which does business with more than 3,000 credit unions and banks worldwide, had been looking to tap Fundtech's presence in India and western Europe to expand in those areas, but itself became a hostile takeover target last month, when ACI Worldwide took its offer directly to shareholders. S1 has called on shareholders to reject the ACI bid and opt for the Funtech merger, but the GTCR has apparently upended those plans.
