# Avaloq partners with Warburg Pincus to accelerate growth Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-03-29 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Warburg Pincus to Acquire ~35% Shareholding in Avaloq Meta Description: Leading fintech Avaloq partners with experienced investor Warburg Pincus to drive long-term growth and enhance banking solutions globally. URL: https://financedigest.com/avaloq-partners-with-warburg-pincus-to-accelerate-growthhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/businessman-standing-and-wo-1736844038913-compressed.jpg) - _Warburg Pincus to acquire a ~35% shareholding in Avaloq_ - _Transaction values Avaloq in excess of CHF 1 billion_ The Avaloq group, an international fintech company and a leader in integrated and comprehensive banking solutions, announces that it has entered into an agreement for Warburg Pincus, a global private equity firm focused on growth investing, to acquire a ~35% shareholding in the company from existing shareholders. The transaction [values Avaloq in excess of CHF 1 billion](https://www.financedigest.com/sulphur-recovery-technology-market-value-to-grow-by-almost-1-2-billion-during-2021-2031.html "Sulphur Recovery Technology Market Value to Grow by Almost .2 Billion During 2021-2031"). Detailed financial terms are not being disclosed. Under the agreement, Warburg Pincus will partner with Swiss-based Avaloq to accelerate the company’s [long-term growth](https://www.financedigest.com/the-benefits-of-investing-in-emerging-market-stocks-for-long-term-growth.html "The Benefits of Investing in Emerging Market Stocks for Long-Term Growth") and value creation strategy. Avaloq serves banks and wealth managers worldwide, having largely completed a [transformation from a pure](https://www.financedigest.com/the-banana-puree-market-to-justify-the-digital-transformation.html "The Banana Puree Market To Justify The Digital Transformation") software company to an integrated service provider. The transaction allows the firm to rebalance its shareholding structure and bring in an experienced partner in Warburg Pincus to help facilitate the next phase of growth and value creation, with an [investment horizon of 7 years](https://www.financedigest.com/halfway-through-2021-what-can-you-do-now-to-finish-the-2021-investment-year-strong.html "Halfway through 2021, what can you do now to finish the 2021 investment year strong?"). Warburg Pincus is a leading investor in the financial services and fintech sectors, with over USD 10 [billion invested in over 90 companies in these sectors](https://www.financedigest.com/conocophillips-plans-1-1-billion-investment-as-norway-oil-sector-heats-up.html "ConocoPhillips plans .1 billion investment as Norway oil sector heats up") (nearly 20 of which are banks). Warburg Pincus’s notable financial services and fintech investments include: AllFunds Bank, Arch Capital, China Huarong Asset Management, FIS/Metavante, HDFC, Interactive Data Corporation, Mellon Bank, Network International, Elavon, Sterling Financial Corp, Santander Consumer USA, [Wall Street](https://www.financedigest.com/disney-streaming-beats-wall-street-targets-earnings-miss.html "Disney streaming beats Wall Street targets, earnings miss") Systems, Webster Bank and many others. _[Shared vision for further growth](https://www.financedigest.com/mycology-immunoassays-testing-market-growth-share-industry-dynamics-top-trends-and-regional-analysis-forecast-to-2027.html "Mycology Immunoassays Testing Market Growth Share, Industry Dynamics, Top Trends and Regional Analysis Forecast to 2027")_ The market for Avaloq’s products and services is due to grow significantly based upon increasing demand for [digital banking](https://www.financedigest.com/how-fs-organisations-can-enter-the-new-age-in-digital-banking.html "How FS Organisations Can Enter The New Age in Digital Banking"), outsourcing, Software as a Service (SaaS) solutions and the overall development of the banking digital ecosystem. Avaloq and Warburg Pincus share the belief that a focus on Avaloq’s customers and developing best in class technology will propel Avaloq to further strengthen its position as [leading global](https://www.financedigest.com/surgical-imaging-market-2021-global-leading-companies-analysis-revenue-trends-and-forecasts-2027.html "Surgical Imaging Market 2021 Global Leading Companies Analysis, Revenue, Trends and Forecasts 2027") services provider to the banking and wealth management industry. This transaction is the first step towards a potential public listing of Avaloq in the [coming years](https://www.financedigest.com/stocks-hit-two-year-lows-sterling-comes-under-fire.html "Stocks hit two-year lows, sterling comes under fire"). As part of the transaction, Avaloq founder and [Chief Executive Officer Francisco Fernandez will also assume the role](https://www.financedigest.com/the-new-role-of-the-cfo-the-de-facto-chief-growth-officer.html "The New Role of the CFO: The De Facto Chief Growth Officer") of Chairman. Jürg Hunziker will [serve as Deputy CEO](https://www.financedigest.com/factbox-long-serving-qantas-executive-vanessa-hudson-named-as-next-ceo.html "Factbox-Long-serving Qantas executive Vanessa Hudson named as next CEO") and Group Chief Markets Officer (CMO). Concurrent with the transaction, Avaloq is creating a [European Advisory Board to support the company’s](https://www.financedigest.com/factbox-what-european-companies-are-doing-as-workers-face-high-inflation.html "Factbox-What European companies are doing as workers face high inflation") strategic initiatives and growth. The European Advisory Board will include Jacques Aigrain, [former Chief Executive Officer of Swiss Re and Chairman](https://www.financedigest.com/wagamama-owner-restaurant-group-names-former-cadbury-executive-ken-hanna-chairman.html "Wagamama-owner Restaurant Group names former Cadbury executive Ken Hanna chairman") of LCH.Clearnet, Stefano Boccadoro, the [former General Manager of Cassa Lombarda Bank](https://www.financedigest.com/metro-bank-former-top-bosses-fined-over-reporting-error.html "Metro Bank, former top bosses fined over reporting error") and Chief Executive Officer of Santander Italy, Stefan Krause, former Chief Financial Officer of Deutsche Bank and BMW and Javier Marin, former Chief Executive Officer of Banco Santander. Francisco Fernandez, commented: “I am delighted to welcome Warburg Pincus as shareholders in Avaloq and look forward to partnering with them as we accelerate the [growth of the business](https://www.financedigest.com/euro-zone-business-growth-slowed-in-may-as-factories-struggled-pmi.html "Euro zone business growth slowed in May as factories struggled-PMI"). Their global presence, in the US, [Europe and years of experience in Asia](https://www.financedigest.com/us-treasurys-top-international-official-heads-to-europe-asia-for-talks-on-economy.html "US Treasury’s top international official heads to Europe, Asia for talks on economy"), combined with their extensive experience in financial services and software, and large network in the broader banking and wealth management industry will be invaluable as we enter a new stage in the development of Avaloq and its geographic expansion. While Avaloq’s management, employees and current [Board of Directors](https://www.financedigest.com/impact-com-announces-appointment-of-ning-wang-to-board-of-directors.html "impact.com Announces Appointment of Ning Wang to Board of Directors") retain the majority by means of shares and governance, we will leverage Warburg Pincus’ expertise to continue our path for capital market readiness.” Daniel Zilberman, a Managing Director and Head of Europe at Warburg Pincus, said: “With its focus on innovation, we believe that Avaloq is uniquely qualified to take advantage of [growing demand](https://www.financedigest.com/frances-axa-q1-sales-rise-2-as-property-policy-demand-grows.html "France’s AXA Q1 sales rise 2% as property policy demand grows") for cutting edge software and outsourced services in the financial industry. We look forward to partnering with Francisco, Jürg and the rest of Avaloq’s talented team as the [company enters a new and exciting stage](https://www.financedigest.com/debt-strategies-for-funding-early-stage-companies.html "Debt Strategies for Funding Early Stage Companies") in its international growth path.” _Terms of the transaction_ As part of this transaction, an affiliate of Warburg Pincus will acquire a ~35% [stake in Avaloq from the firm’s](https://www.financedigest.com/stellantis-to-build-u-s-firm-archers-air-taxi-up-stake.html "Stellantis to build U.S. firm Archer’s air taxi, up stake") founders, management and employees. Francisco Fernandez will retain a ~28% shareholding. [Management and employees will retain an additional ~27% shareholding](https://www.financedigest.com/edf-staff-shareholders-file-complaint-over-management.html "EDF staff, shareholders file complaint over management"). This transaction does not affect the shareholding of the bank Raiffeisen Switzerland. The transaction values Avaloq in excess of CHF 1 billion. Detailed financial terms of the transaction are not being disclosed. Closing of the transaction is expected in the [second quarter](https://www.financedigest.com/dollar-pares-gains-as-us-growth-contracts-for-second-quarter.html "Dollar pares gains as US growth contracts for second quarter") of 2017. Upon closing, Warburg Pincus will nominate two individuals to join Avaloq’s Board of Directors. Adarsh Sarma, a Warburg Pincus Managing Director, said: “Avaloq benefits from best-in-class technology which will form the basis for future growth in the core wealth management and private banking [business](https://www.financedigest.com/two-speed-economy-in-sweden-central-bank-business-survey-shows.html "Two-speed economy in Sweden, central bank business survey shows") as well as in the broader retail and commercial banking sector. In partnering with Avaloq, we will draw upon our deep financial [services and software experience to accelerate the growth](https://www.financedigest.com/nanotechnology-to-spell-the-growth-quotient-gq-of-drug-designing-services-market.html "Nanotechnology to spell the growth quotient (GQ) of Drug Designing Services Market") of the company.” Jürg Hunziker, Deputy Chief Executive Officer and Group CMO of Avaloq, commented: “The technology and [service market for the financial industry is growing](https://www.financedigest.com/growing-cases-of-down-syndrome-to-drive-the-speech-therapy-services-market.html "Growing cases of “Down Syndrome” to drive the Speech Therapy Services Market") rapidly and I believe that there are tremendous opportunities for further growth of the business. I look forward to continuing to [drive Avaloq’s international growth](https://www.financedigest.com/football-shoes-market-globally-expected-to-drive-growth-through-2021-2031.html "Football Shoes Market Globally Expected to Drive Growth through 2021-2031"). In evaluating potential partners to support us with our [growth strategy](https://www.financedigest.com/stone-paper-market-competitive-growth-strategies-based-on-type-applications-end-user-and-region.html "Stone Paper Market Competitive Growth Strategies Based on Type, Applications, End User and Region"), we put special emphasis on company culture, and Warburg Pincus perfectly matches the Avaloq values. They will enable our team to provide the best possible [digital banking technology and innovative services also in the future](https://www.financedigest.com/the-future-for-banks-and-digital-id.html "The Future for Banks and Digital ID"). Thanks to our very loyal customers and highly committed employees we have achieved a [leading position in the market](https://www.financedigest.com/the-temporary-cardiac-pacing-wires-leads-market-to-grow-exuberantly-between-2018-2026.html "The Temporary Cardiac Pacing Wires Leads Market To Grow Exuberantly Between 2018-2026") and are now ready for the next step.” _Strong financial foundation_ The transaction follows excellent financial results at Avaloq in 2016. The firm generated full year revenues of CHF 533 million1 in 2016, an increase of 10% on a reported basis from CHF 485 million in the previous year. Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 41% to CHF 82 million from CHF 58 million in 2015. EBITDA margin improved year over year by 3.4 points to 15.4%. The company enjoyed strong cash flows with net cash provided by operating activities increasing by 100% to CHF 62 million and an 8% [year over year increase in cash on hand](https://www.financedigest.com/german-regulator-hands-ey-2-year-audit-ban-over-wirecard-scandal-handelsblatt.html "German regulator hands EY 2-year audit ban over Wirecard scandal – Handelsblatt") to CHF 63 million. 1 _Results subject to final audit._ --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---