Japan based technology and electric company NEC Corp (TYO: 6701) will be purchasing Swiss based financial software company Avaloq Group AG in a deal worth 2.05 billion Swiss francs ($2.2 billion).
NEC opts to use this acquisition to make entry into the financial software market. For the longest time now Avaloq has remained as a top provider of financial asset management software across Europe.
Currently Avaloq is owned by tree entities the founders, private equity firm Warburg Pincus with 45% stake of the company and some top executive in the company who own stakes in the company.
Last year Avaloq reported sales of 610 million Swiss francs ($664 million) however 70% of the sales were made in Europe. Some of reputable clients for Avaloq include Deutsche Bank AG (ETR: DBK) and HSBC Holding Plc. (HSBA).
Following the acquisition NEC will now be able to offer cloud services with its own biometrics and data analysis products to government entities and financial institutions.
The company says its main target will be the Japanese market since the Asian country is lagging behind when it comes to financial digitalization. Japan’s new Prime Minister Yoshihide Suga pledged to upgrade outdated government systems.
“Japan is lagging in financial digitalization and this will be a big trend,” said NEC’s CEO Takashi Niino.