Goldman Sachs – ACI Worldwide Weighs Its Choices. It May Promote for as A lot as $6.26 Billion.
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Simply weeks after an activist agency urged
to place itself on the block, the payments-software supplier is weighing strategic choices, together with a sale, based on 4 bankers and private-equity executives.
In early December, Starboard Worth pressed ACI to discover a sale. This got here after Starboard disclosed in October that it had gathered a 9% stake in ACI, up from 2% on the finish of June. Starboard is thought for purchasing stakes in firms and pushing administration and boards for modifications.
Executives for ACI, Starboard, and Goldman declined to remark.
Based in 1975, ACI supplies fee software program and providers to monetary establishments, retailers, billers, and fee processors. It’s the former Utilized Communications Inc. and went public in 1995. The corporate, which employs about 4,000 folks, generated greater than $1.26 billion in 2019 income. Its market capitalization is over $4.5 billion.
A sale of ACI is predicted to draw strategic curiosity from potential consumers like
Constancy Nationwide Info Companies
(FIS), Fiserv (FISV), Finastra, and
(MA), in addition to private-equity companies, folks mentioned.
Peter Heckmann, a senior analysis analyst at D.A. Davidson, mentioned ACI may promote for $39 to $51 a share, for an enterprise value of $4.75 billion to $6.26 billion, based on a Dec. 9 analyst word. Giant enterprise software program gamers like
(SAP) is also serious about ACI’s software program, Heckmann advised Barron’s.
SAP declined to remark. Constancy Nationwide Info Companies, Fiserv, Mastercard, Oracle, IBM, and Finastra couldn’t instantly be reached for remark.
A sale would deliver extra value to shareholders than the corporate’s stand-alone plan, which incorporates transitioning to a subscription model, based on a Dec. 2 letter from Jeff Smith, Starboard’s managing member, to ACI Chairman David Poe and CEO Odilon Almeida.
“Before embarking on a transition that could last a decade, we believe the Board must concurrently explore all available strategic alternatives to maximize value, including a sale of the Company. ACI has tremendous value, but it may not be appreciated in the public markets if organic growth rates do not significantly exceed guidance,” Smith mentioned.
In 2019, ACI was reportedly approached by a number of strategic consumers and private-equity companies that have been serious about buying the corporate at a considerable premium, Smith mentioned. ACI’s board is believed to have chosen to not conduct a gross sales course of as a result of they thought there was extra value for shareholders by remaining public than promoting, Smith mentioned.
He famous that ACI’s shares on the time had dropped as a lot as 45% from their annual excessive of $37.89 in 2019. ACI’s shares have since rebounded, closing Wednesday at $38.63. Smith mentioned on the time that he anticipated ACI to retain advisors and conduct a “full and fair sales process.”
ACI may even be below the gun to discover a purchaser earlier than its subsequent annual assembly, which hasn’t been set however is predicted in May. 9 ACI administrators are developing for reelection, Heckmann mentioned. In any other case, Starboard may attempt to advance a aggressive slate of administrators and affect any M&A transaction, he mentioned.
“[ACI] may prefer to get a deal done before the annual meeting to keep control of the process,” Heckmann mentioned.
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