Here is who will buy (and why) Cedacri
The Italian company specialized in IT outsourcing services for the banking sector will be transferred to the English fund Ion. Facts, names, numbers, rumors and insights
With a valuation equal to three times the revenues, or 1.5 billion euros, the Cedacri consortium is about to be taken over by the British fund Ion.
This is what was revealed today by the newspaper Repubblica .
The Ion fund therefore beat the competition from Accenture and Engineering to take over Cedacri, an Italian company specializing in IT outsourcing services for the banking sector.
But Accenture had offered less than the Ion fund by proposing joint ventures (while Cedacri's partners preferred to raise cash).
In fact, the indiscretions that emerged until a few days ago from various parts of the consortium – which initially was looking for a technological-share partner with a view to a possible listing on the stock market – also had two system integrators such as Accenture and Engineering , companies that last February saw the entry into the shareholding of the Bain Capital fund alongside NB Renaissance Partners and led by Paolo Pandozy. The third pretender – which so far the rumors did not give in pole position – was precisely the Ion Investment Group of Paolo Pignataro based in London, specialized in software, data and analysis for financial institutions, which since 2004 has conducted 26 acquisitions for an enterprise total value of 10 billion dollars, working in recent months to refinance its debt.
WHAT IT IS AND WHAT IT DOES ION CAPITAL
Repubblica writes : “The buyer is instead a company based in London, founded by Andrea Pignataro and born in 1998 from a trading platform developed with Italian resources and capital. Ion then transformed itself into a sort of holding specialized in fintech, more famous abroad than at home thanks to acquisitions such as Merger Market, Debtwire, Dealogic and Unquote. But for Ion, the one with Cedracri is the largest transaction made so far, as well as an important investment of a billion capital (over half a billion debt) in Italy. From 2004 to today, Pignataro has conducted 26 acquisitions for a value of 10 billion dollars, a success that last December allowed him to place a half-billion dollar SPAC on the Nasdaq ”.
WHAT IS AND WHAT DOES CEDACRI DO
Cedacri, the consortium of IT services and outsourcing data management chaired by Renato Dalla Riva, born in the 2000s from the merger of two consortia, Cedacri Nord and Cedacri Ovest, active since the 1970s to serve only the shareholder banks of the consortia (such as Cassa di Risparmio di Asti, Banca Popolare Bari, Banco di Desio, Mediolanum Unipol, as well as small holdings of local banks and, mainly, of the Fsi Mid-Market Growth Equity Fund).
"The group that aspires to become a new Sia of banking software and that thanks to Ion will be able to expand abroad, has grown in the last three years thanks to the Fsi fund, which has Cdp as its main shareholder, and which has brought capital and management to invest in acquisitions ”, added Sara Bennewitz of Repubblica .
Here is an excerpt from a recent Start article that took stock of Cedacri:
THE NUMBERS OF CEDACRI
Cedacri in 2019 saw consolidated revenues rise to 382.9 million and EBITDA to 81.2 million, with a net profit of 28.8 million and employees recently increased from 1,700 to 2,400. Whatever the claimant who wins the tender for the possible sale, however, will have to deal with the Golden Power procedure, which allows the executive to reject acquisitions in key sectors by non-European companies and – on a temporary basis up to 30 June 2021 (extension decided a few days ago at the push of Copasir and following an amendment with Adolfo Urso, FdI, first signatory ) – also European.
THE ASSAULT OF FINTECH
Cedacri's problem is clearly the same as that of banks, namely the assault on the system by the fintechs favored by regulation. Consider, for example, the Psd2 directive which has placed traditional banks in the face of competition deriving from the possibility for anyone to offer payment services. The system defended itself by looking for innovative services while consolidating the model based on standard products (loans, mortgages, etc.). Then there are investments in technology and innovation – an investment plan worth 350 million euros over the next 5 years – with a view to beating fintechs on their ground, while exploiting solidity and customer base.
CLOUD GOAL
"The acceleration in the use of digital services for banks is sensational, if we add to this that by now the adaptation of compliance services can absorb up to 70% of the resources for a small or medium bank, the road to mutualisation of investments technology can allow even the smallest banks to stay close to customers and focus on the services offered to them. A different way of being on the market ”, Corrado Sciolla, head of Cedacri, told Corriere della Sera . Cedacri has therefore decided to focus on the creation of a hybrid cloud system through an agreement with the market leader of Infrastructure as a service (IaaS) , Amazon Web Services, whose CEO Andy Jassy just a few days ago illustrated his change of approach to hybrid cloud systems. "It is important for banks to be sure where the data is." Therefore, the choice of AWS is no coincidence, which just last April launched its AWS Region in the Milan area in Italy , first among the Big Tech, which will allow Cedacri to reduce “response latency times. Here, the bank of the future will have to be increasingly secure and faster in responding to customers ", added Sciolla, a manager by nature very open to technology and who actually sees fintechs as natural allies of big banks capable of helping them to rejuvenate in these sectors. vertical service.
A VISION FOR THE BANKING SYSTEM
An approach to innovation that, explained to the monthly InvestireMag , the CEO of Cedacri would like to see extended to the entire banking system: "I would expect enormous rationalizations also on infrastructure, data centers and the development of common platforms to address cybersecurity issues. I would also introduce the concept of the cloud, with part of the banking IT services that could use the cloud, but with the localization of all data on a common infrastructure, with very high bandwidth access to reduce any latency, adequate software and security. of cybersecurity at the highest levels that the banking system requires. This could generate enormous opportunities for efficiency, but at the same time the use of the best technologies available on the market ». Market on which Cedacri focuses through the mutual aid formula that allows the 70 client banks "to reduce costs without losing sight of quality and offer", and closing: "even medium-sized institutions can play a decisive game. Much passes, however, from the way in which technological investments will be managed ».
WHAT THE BANK OF ITALY SAYS
Cloud and banks was a combination that scared many until a few years ago. However, the perspective seems to have changed, even in the eyes of the regulator, which last September adopted the “Recommendations on outsourcing to cloud service providers” issued by the EBA. In the report on "The evolution of the Data Center, the use of the cloud and the modernization of core banking" , edited annually by the CIPA (Interbank Agreement for Automation) in collaboration with the ABI and published last July by the Bank of Italy , clearly emerge advantages and possible criticalities of the cloud for the banking system. Among the most significant benefits expected from the adoption of the cloud emerge scalability, time-to-market reduction and speed of implementation of innovative solutions. This is followed by independence from technological obsolescence, speed of setting up test environments and flexibility of use and cost reduction. The analysis of the expected criticalities, on the other hand, shows that IT security is, by far, the most important one; this is followed by negotiating power with the supplier, data control and adherence to compliance requirements. In the meantime, last February the announcement of Banca Progetto , the digital bank specializing in services for Italian small and medium-sized enterprises (SMEs) and for private customers, arrived, which has decided to bring all its systems to the cloud, making the bank led by the former CEO of Unicredit and Carige Paolo Fiorentino, the first Italian bank to have received from the Bank of Italy the authorization to outsource the entire technological infrastructure.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ecco-chi-comprera-e-perche-cedacri/ on Wed, 03 Mar 2021 10:58:42 +0000.