Swiss banking software company Temenos has agreed to acquire British rival Fidessa for nearly £1.4bn.

The deal was announced following a day after the two companies were stated to be engaged in advanced discussions for a possible takeover by Temenos.

After the announcement of the takeover, Fidessa witnessed a steep jump in its share prices which increased by more than 22%.

On the other hand, Temenos shared slipped by nearly 6% following the acquisition announcement.

Under the terms of the transaction, Fidessa shareholders would receive £35.67 for each share in the all-cash deal.

The prices represent nearly 36.9% premium over Fidessa’s opening price of £26.05 per share on 16 February 2018.

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By GlobalData

Temenos stated that it will fund this transaction by borrowing money, however it did not divulge the amount of capital raising.

In a statement, Temenos chairman Andreas Andreades said that this deal, expected to close in the first half of this year, will accelerate both companies’ complementary growth strategies in banking and capital markets.

It will also enable the two firms to cross-sell to their individual existing client bases, he said.

The combined company would have had revenues of more than $1.2bn in the last year with a core profit margin of 32.3%.