​​​​​​NEC to buy Avaloq for $2.2 billion

Avaloq represents an entry into fintech for ​​​​​​NEC. The conglomerate is acquiring a proven provider of cloud solutions for banks and wealth managers around the globe, with more than 30 years of experience under its belt

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​​​​​​NEC to buy Avaloq for $2.2 billion

​​​​​​Japanese electronics conglomerate ​​​​​​NEC has struck a deal to buy Switzerland-based Avaloq, a provider of digital banking solutions, core banking software and wealth management technology, for $2.2 billion.

Warburg Pincus owns a 45% stake in the core banking software company, with the rest owned by Avaloq’s founder and employees.

Following completion of the acquisition by April 2021, Avaloq will continue to operate as its own entity, headquartered in Switzerland.

Avaloq represents an entry into fintech for ​​​​​​NEC. The conglomerate is acquiring a proven provider of cloud solutions for banks and wealth managers around the globe, with more than 30 years of experience under its belt.

NEC has ambitions to build ‘smart cities’ and is investing in research and development for biometrics, blockchain and artificial intelligence technologies, in order to take advantage of digitisation and big data transformations around the world.

The conglomerate believes Avaloq has the potential to complement this work by democratising wealth management and making asset classes and advice-led banking services available to mass affluent investors, which represent a highly attractive segment of new clients for private banks and wealth managers.

Juerg Hunziker, chief executive officer of Avaloq, said of the acquisition: “Due to very similar values of professionalism, reliability, quality and excellent service for clients with a focus on precision, we firmly believe that this partnership will be a successful one for employees, clients as well as other stakeholders.”

Francisco Fernandez, founder and chairman of Avaloq, added: “Talking to NEC’s top managers, it became clear to me that they share my ambition for Avaloq to continue to shape the future of the financial industry by continuing to invest heavily in R&D.”

Takashi Niino, president and chief executive officer of NEC Corporation, said: “NEC strongly believes in the importance of safety and security around financial institutions, which is absolutely crucial for sustainable prosperity and digital inclusion. Avaloq is a recognised global leader in their field, and their compelling offering is expected to complement our current solutions. NEC aims to further expand its business in the digital government and digital finance areas, by globally developing SaaS and BPaaS business models that utilise software and technologies from throughout the NEC Group, including Avaloq’s.”