The acquisition will add collateral management operations, regulatory reporting and compliance products to Vermeg’s array of banking and insurance solutions.
European banking and insurance software vendor Vermeg has completed its acquisition of Lombard Risk, a collateral management and regulatory reporting solutions vendor, described as “a key milestone” in Vermeg’s bid to become a major player in the financial services solutions realm, officials say.
The acquisition will add collateral management operations, regulatory reporting and compliance products for banks and buy-side firms to Vermeg’s “150-strong” client base of insurers, institutional investors, asset managers, depositories and central banks, officials say.
The news follows the initial announcement in January that the boards of directors of Vermeg Group N.V., based in Brussels, Belgium, and Lombard Risk Management plc, based in London, had reached agreement on the terms of a cash offer by Vermeg to acquire “the entire issued and to be issued ordinary share capital of Lombard Risk,” according to official documents.
The January announcement set in motion the legal and regulatory approvals needed to complete the deal.
“Under the terms of the acquisition, each Scheme Shareholder will receive 13 pence in cash for each Ordinary Share (the Offer Price), valuing the entire existing issued ordinary share capital of Lombard Risk at approximately £52.08 million [$72.8 million],” according to the initial offering document.
In addition to the broader product line, the Lombard Risk acquisition will mean that Vermeg will have offerings in “fast growing areas including collateral management and regulatory risk solutions,” officials say. Vermeg, which has offices in France, Belgium, Luxembourg, Spain, the Netherlands and Tunisia, has annual revenues of €54 million ($66.4 million).
Vermeg’s solutions cover:
- Pensions and insurance companies;
- Wealth and asset management;
- Financial markets and securities services;
- Bespoke solutions development;
- And property and casualty insurance.
The Lombard Risk offerings are:
- Lombard Risk Colline: A cross-product solution that “provides a single enterprise-wide platform consolidating collateral across all asset classes, giving maximum control and visibility,” officials say. The web-based solution offers support for “regulatory and strategic collateral management needs” via an enterprise inventory manager that can interface with incumbent systems. The solution offers features that help users:
- Automatically calculate exposure and balance collateral needs;
- Manage end-to-end margin call workflows;
- The reconciliation of margin call disputes;
- Calculate interest and produce fully configurable client statements;
- Provide consolidated information in user-defined dashboards;
- And support an array of risk and trade analytics.
- Lombard Risk AgileCollateral: Targeted at the buy side, AgileCollateral is a cloud-based solution that streamlines the need for training, and is modular “from adding asset classes as needed, to scaling up over time to handle more complexity and volume,” officials say.
“Our strategy is guided by our analysis of the future evolution of the market, the changing needs of our customers,” says Badreddine Ouali, chairman and founder of Vermeg, in a prepared statement. “We take into account several key trends including the convergence of banking and insurance, coupled with increased levels of complexity in regulation and efficiency. … This larger Group will also enable us to attract even more world class talent and provide our employees with amazing opportunities.”
The combination of Lombard Risk and Vermeg will create a powerful, global financial services software champion, and we strongly believe that the new group will be well positioned to generate and seize exciting opportunities in the future,” says Alastair Brown, CEO of Lombard Risk, in a statement. “Our dedicated focus on the collateral management and regulatory reporting industries will continue, while opening access across the Group to the markets in the UK, North America and Asia-Pacific.”
Over the years, Lombard Risk has been partnering with other vendors such as a pact with GlobalCollateral announced this past September that is an alliance intended to improve the margining support and streamline collateral management operations.
In November 2014, Genpact, a specialist in business processes, operations and technology, and Lombard Risk joined forces to help firms optimize increasingly expensive collateral management operations. A new collaboration between the two will integrate Genpact’s Collateral Agreement and Reference Data Services (CARDS) and Lombard Risk’s Colline offering.
The management teams of Lombard Risk and Vermeg have begun working together. One of the first steps is that Lombard Risk will be delisted from the London Stock Exchange (LSE) and will be known as Lombard Risk, a Vermeg company, officials say.
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