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GBST completes acquisition of Coexis

  • Acquires leading UK-based securities software house
  • Key acquisition in GBST’s strategy to establish a leading global securities transaction platform
  • Substantially increases GBST’s customer base in Asia, Europe and North America
  • Coexis forecast for calendar year ending December 2009 EBITDA of £4 million; on revenue £12 million
  • Key executives retained
  • Acquisition funded through:
    • £12.5 million cash;
    • 7.3 million shares; and
    • Deferred payments of £1.5 million cash and up to 1.4 million shares

GBST Holdings Limited (ASX: GBT), Australia’s leading provider of securities transaction technology, today announced that it has completed the acquisition of Coexis Limited, a leading UK-based provider of securities software for global capital markets.

The acquisition extends GBST’s operations across 15 countries in Asia, Europe, North America and Oceania, and complements GBST’s Wealth Management services in the UK. The combined group will employ 350 staff, with annual revenue of  approximately $90 million.

Former Coexis executive chairman Terry Williams will join GBST’s board and former Coexis CEO Sunil Shah will join GBST’s executive team as head of GBST Global Broker Services. All Coexis staff will join GBST, and GBST will consolidate its existing London operations with Coexis.

Coexis brings to GBST a customer base of leading institutions and investment banks, including JP Morgan Cazenove, Mitsubishi UFJ Securities International, CLSA, Penson and Swisscanto (for 26 Swiss Cantonal banks), and partnership/distribution  agreements with Atos Worldline, Serisys Solutions and Sungard Financial Services.

Coexis was founded in the 1970s, and was transformed in the early 2000s with the transition of management from ADP Wilco, a subsidiary of Automatic Data  Processing, Inc., including Mr Williams and Mr Shah. The company has achieved compound annual revenue growth of 40 per cent over the past three years and expects EBITDA of £4 million on revenue of £12 million for the year ending December 2009.

Coexis’ Syn~ next-generation technology is a development platform for modelling business flows and creating solutions for financial markets, including equity and fixed income middle and back office securities processing, enterprise-wide reference data, asset servicing, multi-exchange and multi-CSD (Central Securities Depository), funds order management and order routing.

Stephen Lake, Group CEO of GBST, said, “We are excited by the potential of this acquisition, which provides us with a leading, fully-developed technology platform for further global expansion. This next-generation technology offers great scalability and flexibility for our customers and will enable us to compress new product time-to-market.”

Sunil Shah, CEO of GBST Global Broker Services said: “The goal now is to rapidly extend GBST’s global broker services by bringing to fruition our very strong sales pipeline and beginning the transition of all institutional broker services clients to a common technology platform.”

GBST has paid Coexis’ vendors £12.5 million cash and 7,336,000 GBST shares. Subject to shareholder approval, Coexis staff who are also shareholders will receive further payments of £1.5 million cash and up to 1,414,000 shares over the next two years, subject to their remaining employees of the company and to Coexis meeting certain performance targets. The cash component will be debt-funded and financing has been confirmed. The shares will be held in escrow for two years.

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