NEC, Japan’s IT major will take over Avaloq, a Warburg Pincus-backed software company for $2.2 billion, media reports said. The acquisition marks a push for NEC into the technology space for the financial services industry.
It is reported that NEC will acquire a 100 percent stake in Avaloq from Warburg Pincus including its employees and founders. Avaloq is Europe’s top financial asset management software provider firm.
NEC, told the media, “Japan is lagging in financial digitalisation and this will be a big trend. The company will target Japan, where financial institutions have been slow to move online and the new Prime Minister Yoshihide Suga has pledged to modernise outdated government systems.”
The acquisition will pave the way for NEC to provide cloud services along with its own biometrics and data analysis products to the government and financial institutions as digitalisation spurs.
It is reported that Avaloq recorded $664 million in sales in 2019 where 70 percent of the sales floated from Europe. The company’s portfolio of companies includes big names such as Deutsche Bank and HSBC.
The company has worked hard towards unprofitable units that lost business grip to Asian counterparts, selling its computer, smartphone units and semiconductor.
The last major acquisition for NEC was in 2018 when it took over British IT services company Northgate Public Services. NEC also acquired Danish egovernment services firm KMD for more than $1 billion last year.