Media
Xchanging and SIA-SSB sign contracts to form an Enterprise Partnership
02 Aug 2010
LONDON, 02 August, 2010 – Xchanging (LSE: XCH), one of the largest and fastest growing global business processors, has signed a contract with SIA-SSB, the European leader in financial and payment systems services, to form an Enterprise Partnership (EP). The two companies had signed a letter of intent in June 2010 to form this EP.
As part of this EP, Xchanging has acquired 51% of Kedrios S.p.A. (Kedrios), the Italian subsidiary of SIA-SSB that specialises in securities processing and fund administration services for the Italian market. With this EP, Xchanging enters the Italian market, which is the one of the largest outsourcing markets in Europe. Adding to Xchanging’s securities processing and investment account administration platforms in Germany, this Italian market entry positions Xchanging as a pan-European operator for blue-chip financial services organisations.
Xchanging has assumed operational control of Kedrios and its 152 employees. Xchanging now employs over 1,300 staff and processes over 40 million transactions per year for more than 100 customers on its Continental European financial markets platforms.
Strategic rationale for the partnership
With the addition of Kedrios for funds processing, Xchanging can offer an integrated platform for securities processing, investment account administration and fund administration services and deliver significant economies of scale to customers.
In particular this partnership delivers the following benefits:
- allows Xchanging to serve its existing customers who have operations in the Italian market
- expands Xchanging’s international customer base
- adds a new platform generating scale within Xchanging’s financial markets operations.
David Andrews, CEO Xchanging said, “This Enterprise Partnership marks a major step forward in our European growth strategy. Italy will be our tenth country of operation. We are delighted to be entering this market with a strong player such as SIA-SSB”.
Massimo Arrighetti, SIA-SSB CEO, said: "Xchanging has selected SIA-SSB to enter the Italian market, acknowledging the high reputation that for 33 years has distinguished our company in the financial industry. There is the potential for generating mutual benefits from this partnership. With Xchanging, we share our core values: a proven track record, extensive know-how, quality and reliability of services."
Matthias Sohler, Managing Director, Continental Europe for Xchanging added, “The entry into the Italian market represents another important milestone in our growth. This new Enterprise Partnership will allow us to provide a broad range of services to the financial markets in Continental Europe. With SIA-SSB, we have the perfect partner; with all major Italian banks as shareholders, the partnership provides us excellent opportunities for new business”.
Enterprise Partnership details
Revenues for Kedrios for the year ended 31 December 2009 were €18.0 million1. Gross assets at this time were €17.4 million. The impact on Xchanging’s financials in 2010 is not expected to be material. Xchanging is confident that it can leverage its expertise and capabilities to grow the business as it has its other EPs. Xchanging’s comprehensive processing initiatives are anticipated to yield significant savings, such that the EP is expected to break even during 2011, and deliver profits to the Group in 2012.
Xchanging has subscribed to a 51% stake in the EP through a share capital increase and will invest in the EP over the next two years to re-organise the business and create a platform for future growth. Xchanging has granted SIA-SSB the option to sell its shareholding to Xchanging at a fair market value, which is subject to a cap, after the third anniversary of change of control.
The share capital increase and subsequent investments totalling €4.1 million will be funded through existing cash resources.
1 This excludes revenues from a business unit that was disposed of in March 2010.
About Xchanging’s Continental European presence
The core of Xchanging’s financial markets business is the Frankfurt based Xchanging Transaction Bank (XTB – Xchanging’s EP with Deutsche Bank). XTB provides a complete range of securities processing services. Xchanging provides retail and institutional investment account administration services and an open fund platform to financial market participants in Germany through Fondsdepot Bank (Xchanging’s EP with Allianz Global Investors). It is the leading independent provider of investment account administration services in Germany. By the end of 2010, Xchanging will have 1.7 million active investment accounts, €31 billion assets under administration and will cover approximately 100,000 individual sales agents.
For further information, please contact:
Xchanging – Group PR
Meeta Thareja
Tel: +44 (0)20 7780 5374
meeta.thareja@xchanging.com
UK - Cardew Group
Tel: +44 (0)20 7930 0777
xchanging@cardewgroup.com
Xchanging – Continental Europe
Christiane Kampling, Continental Europe
Tel: +49 (0) 69 12 0 12 60243
christiane.kampling@xchanging.com
Heller & Partner
Stefan Riedel
Tel: +49 (0)89 45710 330
sr@heller-partner.de
About Xchanging
Xchanging is one of the largest and fastest growing business processors. With a wide range of multinational customers in 42 countries and employing over 8,000 people, we are a truly global company. Our aim is simply to provide business processing services better, cheaper and faster.
Xchanging provides procurement, accounting, human resources and technology services across industries. These include banking, insurance, manufacturing, retail and real estate among others. We combine functional expertise with deep industry domain knowledge to provide industry-specific outcomes for our customers.
Listed on the London Stock Exchange in 2007, the company is in the FTSE250, the index of mid-capitalised companies traded on the London Stock Exchange. Xchanging is also a member of the FTSE4Good index which measures the performance of companies that meet globally recognised corporate responsibility standards.