Deutsche Boerse: Exchange Group Announces Planned Takeover of Simcorp

Wide-moat Deutsche Boerse announced its intention to acquire Simcorp, the publicly listed investment management software provider, for an equity value of EUR 3.9 billion. The deal makes strategic sense as it plugs a hole in Deutsche Boerse's data and analytics business. Simcorp adds portfolio management, trading and execution, portfolio accounting, and post-trade operations, as well as risk management to Deutsche Boerse's suite of products, which had been primarily focused on portfolio design and monitoring solutions up until now. The deal looks to be on the expensive side, however. We plan to update our model shortly, which we believe is likely to result in a change to our EUR 180 fair value estimate within a 10% range. Our wide-moat rating is unchanged.