Geneva-based banking software company Temenos AG has agreed to acquire Texas-based Kony Inc., a digital banking software-as-a-service company, for an enterprise value of $559 million and an earn-out of $21 million, subject to regulatory approvals.
The purchase will be funded through cash and debt.
The acquisition is expected to enhance Temenos' scale and capabilities in the U.S. and strengthen Temenos Infinity, its digital front-office product with more than 500 banking clients.
Thomas Hogan, chairman and CEO of Kony, will become president of Temenos North America and join Temenos' executive committee, effective on the acquisition closing date, which is expected early in the fourth quarter.
Kony's total revenue is expected to reach $115 million in 2020, and is expected to be accretive to Temenos' growth from 2020. More than 60% of the total revenue is recurring, the majority of which is software as a service. The acquisition is expected to be non-IFRS EPS neutral in 2020, accretive from 2021 and to reach group margins within three years.
