Regulatory News:
Sopra Steria (Paris:SOP), a major tech player in Europe,
announces its intention to sell most of Sopra Banking Software’s
operations to Axway Software, representing annual sales of around
€340m, for an enterprise value of €330m. As part of this project,
Sopra Steria also intends to sell 3.619 million of Axway shares to
Sopra GMT, at a price of €26.5 per share for an amount of
€95.9m.
Sopra Steria is actively pursuing an independent model that
creates sustainable value for its stakeholders. In this context,
the Group is clarifying its strategy with the announcement of its
intention to sell its banking software operations.
Sopra Banking Software was created in 2012 by capitalising on
banking software assets from Sopra’s legacy and several
acquisitions that significantly enhanced its core banking and
specialised credit offerings. The strategy developed by Sopra
Banking Software is to be a high-value business software provider.
It has more than 650 clients worldwide, including the 10 largest
European banks and half of the banks in Africa. 250 banks in Europe
use Sopra Banking Software’s payment solutions.
This project fits Sopra Steria's ambition to strengthen its
presence in Europe and to focus its investments on consulting and
digital services in its strategic market verticals: financial
services, defense & security, aerospace and public sector. The
Group aspires to become a compelling European alternative to global
players, in particular to provide solutions to its major European
clients’ digital sovereignty challenges.
In this respect, the project announced today would entail a
global operation with two indivisible components: the sale by Sopra
Steria to Axway Software of most of Sopra Banking Software’s
activities on the one hand, and the sale by Sopra Steria to Sopra
GMT of 3,619 million of Axway securities on the other.
Regarding the disposal of the majority of Sopra Banking
Software’s activities to Axway Software, the scope in question
generated around €340m of revenue during fiscal year 2023, which
represents approximately 80% of Sopra Banking Software's entire
business. Retained activities would consist of services or project
activities for large banks or financial institutions which will
continue to contribute to Sopra Steria’s ambitions in the financial
services market.
The contemplated disposal would be completed for an enterprise
value of €330m.
Axway Software has announced its intention to finance part of
the contemplated transaction through a capital increase with
preferential subscription rights attached (rights issue). Sopra
Steria would not subscribe to the rights issue but would sell all
of its rights to Sopra GMT who indicated its intention, as part of
the capital increase, to exercise its rights and those acquired
from Sopra Steria, and to commit to subscribe any shares that would
remain unsubscribed at the end of the allocation process.
As part of this project, Sopra Steria intends to sell 3.619
million of Axway shares out of the 6.914 million shares that it
currently holds to Sopra GMT. This sale would be completed at a
price of €26.5 per Axway share, for an amount of €95.9m, which
represents a 4.7% premium on Axway’s 6-month VWAP and a 2.9%
discount on Axway’s 3-month VWAP.
The valuation of Sopra Banking Software’s activities (€330m
enterprise value) and the Axway price per share (26.5€ per share)
will be reviewed by an independent expert (Crowe HAF).
After these transactions, taking into account the capital
increase of Axway and the sale by Sopra Steria to Sopra GMT of its
preferential subscription rights, Sopra Steria would remain a
shareholder of Axway with a stake of around 11% and would benefit
from Axway’s value creation through its residual shareholding. In
addition, a new strategic partnership between the two companies
would be established.
At Sopra GMT level, Sopra Steria’s reference shareholder with
19.6 % of its share capital, the financing of these operations
would be ensured by a capital increase reserved to a financial
minority partner (One Equity Partners), with whom Sopra GMT is in
advanced discussions to conclude a binding agreement1. Sopra GMT
affirms its commitment and support to the success of Sopra Steria’s
enterprise project. Sopra Steria’s capital structure remains
unchanged.
The estimated accounting impacts on Sopra Steria include (i) a
slight accretion on its operating margin rate on an annual basis
and (ii) a decrease of its net financial debt by at least €425.9m
and a stronger investment capacity to pursue its growth strategy,
including through acquisitions, with strict financial
discipline.
Sopra Steria granted exclusive rights to Axway and Sopra GMT to
negotiate these transactions. At the end of these negotiations, the
conclusion of binding agreements between Sopra Steria, Axway and
Sopra GMT will remain subject to the approval of the boards of
directors of the three companies, based on the reports of the
independent experts, that will take place after information and
consultation procedures with the employee representative bodies of
the entities in question.
The goal is to complete these operations before the end of the
second quarter of 2024 or, at the latest, during the third quarter
of 2024. They would be subject to obtaining the necessary
regulatory approvals, including a decision by the AMF on the
absence of any obligation to file a tender offer2, and to the
approval by the AMF of the prospectus to be submitted by Axway as
part of its capital increase.
Société Générale acts as Financial Advisor to Sopra Steria
Group. Crédit Agricole Corporate and Investment Bank acts as
Financial Advisor to Axway. Messier & Associés acts as
Financial Advisor to Sopra GMT.
Pierre Pasquier, Chairman of Sopra Steria Group,
stated:
“The strategic review conducted since 2022 has led us to
accelerate our transformation to adapt the company to a fast moving
environment, ensure its development throughout Europe and reach a
top level of performance within our industry. Our ambition is to
make Sopra Steria a genuine European alternative to global players
in the industry.
Developed since 2012 based on banking software assets from
Sopra’s history and acquisitions, Sopra Banking Software’s software
business is not central to the strategic priorities of a European
digital services company like Sopra Steria. It is in this context
and in line with the transformations already engaged, that today‘s
announcement clarifies our strategy with the plan to focus our
activities and investments on digital services and solutions in
Europe.
In this new model, and in order to meet the challenges of an
increasingly digital world where software plays a prominent role,
it will be strategically important to develop a stronger
partnership between Sopra Steria and Axway Software to support the
digital transformation of our major clients in the financial
services sector.
Sopra GMT is actively committed to the success of Sopra Steria’s
and Axway’s enterprise projects in the long term. The project
announced should create value for customers, employees and
shareholders in both groups”.
Fiscal year 2024 will be dedicated to building Sopra Steria’s
strategic plan for the 2025-2027 period. This plan will be
presented during a Capital Market Day scheduled for the beginning
of December 2024.
Analysts and Investors Meeting
A meeting with financial analysts and investors via a bilingual
French / English webcast will take place on Thursday, February 22,
2024 at 8:30 a.m. Paris time.
- Registration for the French webcast: here -
Registration for the English webcast: here
Or by phone:
- French access number: +33 1 70 37 71 66 -
English access number: +44 33 0551 0200
Practical information about this conference and its webcast
diffusion can be found on the Group's website under the Investors
section: https://www.soprasteria.com/investors
Upcoming financial publications
Thursday, February 22, 2024 (before market opening): 2023 annual
results publication.
Friday, April 26, 2024 (before market opening): Q1 2024 revenues
publication.
Tuesday 21 May 2024 at 2:30 p.m.: General Meeting of
Shareholders.
Wednesday, July 24, 2024 (after market close): publication of
results for the first half of 2024.
Thursday, October 31, 2024 (before market opening): Q3 2024
revenues publication.
Basis of the derogations that will be requested from the
AMF
One Equity Partners would, as a result of its acquisition of a
stake in Sopra GMT, indirectly in concert, exceed the thresholds of
30% of Sopra Steria's voting rights and 30% of Axway's share
capital and voting rights. In connection with this acquisition, the
AMF will be asked to grant waivers to the mandatory filing of a
tender offer on Sopra Steria and on Axway on the basis of Articles
234-7, 1° and 234-7, 2° of the AMF's general regulation.
Sopra GMT, individually, (i) would, as a result of the
acquisition of Axway shares from Sopra Steria, exceed the
thresholds of 30% of Axway's share capital and voting rights and
(ii) would, as a result of its participation in Axway's capital
increase, increase its stake in Axway's share capital and voting
rights by more than 1% within a period of less than twelve
consecutive months; a waiver to the mandatory filing of a tender
offer on Axway will also be requested from the AMF on the basis of
article 234-9, 6° of the AMF's general regulation.
Disclaimer
This document contains forward-looking information subject to
certain risks and uncertainties that may affect the Group’s future
growth and financial results. Readers are reminded that license
agreements, which often represent investments for clients, are
signed in greater numbers in the second half of the year, with
varying impacts on end-of-year performance. Actual outcomes and
results may differ from those described in this document due to
operational risks and uncertainties. More detailed information on
the potential risks that may affect the Group’s financial results
can be found in the 2022 Universal Registration Document filed with
the Autorité des Marchés Financiers (AMF) on 17 March 2023 (see
pages 40 to 45 in particular). Sopra Steria does not undertake any
obligation to update the forward-looking information contained in
this document beyond what is required by current laws and
regulations. The distribution of this document in certain countries
may be subject to the laws and regulations in force. Persons
physically present in countries where this document is released,
published or distributed should enquire as to any applicable
restrictions and should comply with those restrictions.
About Sopra Steria
Sopra Steria, a major Tech player in Europe with 56,000
employees in nearly 30 countries, is recognised for its consulting,
digital services and software development. It helps its clients
drive their digital transformation and obtain tangible and
sustainable benefits. The Group provides end-to-end solutions to
make large companies and organisations more competitive by
combining in-depth knowledge of a wide range of business sectors
and innovative technologies with a fully collaborative approach.
Sopra Steria places people at the heart of everything it does and
is committed to putting digital to work for its clients in order to
build a positive future for all. In 2023, the Group generated
revenue of €5.8 billion. The world is how we shape it. Sopra
Steria (SOP) is listed on Euronext Paris (Compartment A) – ISIN:
FR0000050809 For more information, visit us at
www.soprasteria.com
____________________________ 1 One Equity Partners would own
around 20% of Sopra GMT’s share capital. 2 See below for the basis
of the derogations that will be requested from the AMF.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240221074415/en/
Investor Relations Olivier Psaume
olivier.psaume@soprasteria.com +33 (0)1 40 67 68 16
Press Relations Caroline Simon (Image 7)
caroline.simon@image7.fr +33 (0)1 53 70 74 65
Sopra Steria (EU:SOP)
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