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Temenos Acquires Kony for $559m to Deepen Capabilities in the US

Temenos

Temenos has agreed to acquire Kony, a US-based digital banking software-as-solution (SaaS) company.

The acquisition will enhance Temenos’ scale and capabilities in the US and adds significant digital expertise.

The banking software company agreed to purchase Kony for an enterprise value of $559 million and an earn-out of $21 million, to be funded through cash and debt, subject to regulatory approvals.

Thomas E. Hogan, chairman and CEO of Kony, will become president of Temenos North America and join Temenos’ executive committee, effective on the acquisition closing date.

Kony has achieved rapid growth with both top tier and mid-market banks in the US and internationally with its Kony digital banking experience product (Kony DBX).

With 1,500 employees the SaaS company has been helping banks transform the experience for their clients with digital banking applications and its development platform, all of which are served through a cloud hosted SaaS model.

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Kony’s banking clients have achieved over 20% increase in mobile deposits, 64% increase in mobile credit card payments and significantly reducing abandonment rate from 20% to 3%.

Max Chuard, CEO of Temenos, says: “We are acquiring a digital front office product that has already been successful in the US market and is connected to most third party cores.”

The transaction is due to be completed by early Q4 2019 and is subject to customary regulatory approvals.

Kony’s total revenue is expected to reach $115 million in 2020 and is expected to be accretive to Temenos growth from 2020. Over 60% of the total revenue is recurring, the majority of which is SaaS. The acquisition is expected to be non-IFRS EPS neutral in 2020, accretive from 2021 and to reach group margins within three years.

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