724 Solutions Inc. boosted its wireless financial services profile last week by acquiring Tantau Software, Inc., a provider of software platforms that help businesses conduct high-volume, secure and mobile transactions.
The transaction closes in the first quarter of 2001.
724 Solutions provides Internet infrastructure software that enables clients to offer secure online banking, brokerage and e-commerce services with Internet-enabled devices.
“Together we have a strong, global footprint, a high-caliber, complementary customer base, top industry talent and the ability to offer superior solutions across a single, secure platform,” said Greg Wolfond, 724’s chairman and chief executive officer, who will serve as chairman. Tantau’s President and Chief Executive Officer John Sims will be the chief executive officer.
The agreement is valued at approximately $375 million on a fully diluted basis and is predicated on 724 Solutions’ closing stock price on Nov. 28.
The acquisition requires 724 to issue 19 million shares, which includes Tantau’s shares. 724 Solutions shareholders will own approximately 68 percent of the combined company while Tantau’s shareholders will own about 32 percent.
Since their inception, both companies have provided wireless Internet infrastructure and applications to help banks around the world ensure smoother and speedier transactions to their customers, such as access to account information, fund transfer, bill payment, and access to stock information on mobile phones, PDAs, pagers and television set-top boxes.
One of 724 Solutions’ services had been to provide applications to ensure that anxious customers who had been cut off in the middle of a transaction could easily reconnect to where they left off. The application maintains both the position of the user and the transaction sequence, which is connected to the back end of the bank’s infrastructure.
“With very little overlap between the two companies, we expect a seamless integration, and we expect to begin capitalizing quickly on our strengths. … We plan to leverage the combined size and scale of the businesses and our strategic OEM and reseller relationships to drive the growth of mobile transactions into additional vertical applications,” said Sims.
The combined company, which will serve about 272 million customers worldwide, reinforces the two companies client bases around the world. Tantau is rooted in Europe while 724 Solutions has its foothold in North America.
Tantau’s blue chip clients include Chase Manhattan Bank, Commerzbank, Credit Suisse Group, MeritaNordbanken, the New Zealand Stock Exchange, Rabobank International and SE Banken, while 724 Solutions offers services to BBVA Bancomer, Bank of America, Bank of Montreal, ClarityBank.com, Citigroup, Hanvit Bank, Key Corp, Wachovia and Wells Fargo.
Features of Tantau’s wireless Internet platform include multiple protocol support, gateways for integration with back-end applications and data sources, end-to-end security from the device to the data center, critical scale and performance features like load balancing and fail-over, wireless session management, Java-based development environment, and multiplatform availability on Unix (HP-UX, Solaris, Tru64) Windows NT and Compaq NSK.
