2nd UPDATE: Asseco Poland To Buy Israel's Formula Systems
September 03 2010 - 9:59AM
Dow Jones News
Asseco Poland SA (ACP.WA), Europe's fifth-largest software
vendor by sales, said Friday it agreed to buy a controlling stake
in Nasdaq-listed, Israel-based Formula Systems (FBT.TV).
The acquisition gives Asseco access to new markets, to the
know-how of the innovative Israeli start-up culture, as well as to
new products and technology, Asseco Chief Executive Adam Goral
said. "We've bought something it would have taken us years to
build."
Asseco will pay no more than $145.3 million in cash for the
50.19% stake, the company statement said in a statement. The
sellers are Israel-based investment fund Emblaze Ltd. and a private
individual.
Through its acquisition of Formula Systems, a holding company,
Asseco is buying controlling stakes in three listed subsidiaries,
Matrix IT (MTRX.TV), Magic Software Enterprises (MGIC.TV), and
Sapiens International Corp (SPNS.TV).
Matrix IT, listed on the Tel Aviv Stock Exchange or TASE, is
Israel's largest IT and integration company, with a client list
that includes Israel government ministries, its aerospace industry,
as well as Microsoft Corp (MSFT), SAP AG (SAP.XE), and Texas
Instruments Inc (TXN).
Through Magic Software, Asseco is acquiring a cloud computing
business, something completely new to Asseco as well as a chance to
present our products to companies such as UPS Inc (UPS) or Sony
Corp (6758.TO), Goral told reporters at a news conference.
Sapiens, which provides business solutions to insurers such as
Allianz, Aviva and Axa, will help "make more of an impression" on
Poland's largest insurer Powszechny Zaklad Ubezpieczen SA
(PZU.WA).
"Asseco gives [Formula] access to markets, especially central
and eastern Europe, where until not we have been practically
absent," said Guy Bernstein, the chief executive of Formula
Systems.
Formula Systems is also listed on the TASE. In 2009, it reported
$19.1 million in net profit on sales of $469.4 million.
Rzeszow-based Asseco Poland has grown from a little-known
producer of software for cooperative banks to Europe's
fifth-largest software vendor by sales after a series of
acquisitions in and outside Poland.
Both Formula as well as its subsidiaries have plans to make
acquisitions themselves, the two companies said.
At 1246 GMT, shares in Asseco were down 0.2% at PLN55.00,
underperforming Warsaw's large-cap WIG20 index.
-By Marynia Kruk and Malgorzata Halaba, Dow Jones Newswires;
+4822 447-2430; malgorzata.halaba@dowjones.com