Bottomline Technologies Stock Rockets On Hopes For Sale

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Bottomline Technologies competes with other large banking technology companies such as Fiserv.

The time of dreams

Actions of


Core technologies

climbed nearly 14% on Friday after learning the company had hired an investment bank and could be put up for sale.

Bottomline (ticker: EPAY), which provides cloud-based enterprise payment technology, is considering strategic options including a sell, Bloomberg said. Fintech from Portsmouth, NH has hired


German bank
,
Barron confirmed. Bottomline shares rose $ 6.22 to $ 50.92 in afternoon trading.

Bottomline did not respond to posts for comment. Deutsche Bank declined to comment.

Founded in 1989, Bottomline is a conglomerate of several different companies. It provides cloud software for digital banking services to businesses and also operates a B2B payment settlement network. Its software helps businesses automate their accounts payable while its legal expense management operation helps insurance companies monitor their legal expenses. It has more than 10,000 clients, including banks, insurance companies and health organizations.

Bottomline, which went public in 1999, generates around $ 500 million in revenue per year. It competes with other large banking technology companies such as


Fiserv

(FISV),


Fidelity National Information Services

(FIS), and


Jack Henry & Associates

(JKHY).

Deutsche Bank hiring comes just months since Bottomline agreed in October to add three new directors to his board at the request of militant shareholders


Free field

Capital Management and Sachem Head Capital Management. With the three directors, the board of directors of Bottomline has grown to 11 people.

Bottomline this month too formed a strategic committee who she said would make recommendations on the company’s market position, strategy and opportunities to create additional shareholder value. Clearfield and Sachem did not respond to messages seeking comment.

Peter Heckmann, senior research analyst at DA Davidson, said in a research note on Friday that he was not surprised by the news, especially since Bottomline had formed the committee. “While we cannot rule it out, we believe a sale of the entire company is unlikely, and we suspect management would prefer to remain independent,” said Heckmann, who maintained a neutral rating on Bottomline action, with a target of $ 50 for the price.

Heckmann criticized Bottomline in another February research note, saying the company was not living up to the potential of its core growth businesses. He called on the management of Bottomline and its board of directors to commit to an achievable three-year plan of growth and margins.

Bottomline does not have to sell the whole business but could offload one of its business units. Heckmann believes Bottomline should divest its legal spend management group to an insurtech and focus more on growing its payments and digital banking segments.

If sold, Heckmann said, Bottomline could be valued at between $ 54 and $ 60 per share, or between $ 2.5 billion and $ 2.8 billion. The company has very little debt, around $ 130 million at the end of the quarter ended Sept. 30, Heckmann said. He has $ 127 million in cash.

Bottomline has attracted interest from private equity buyers, Bloomberg said, but according to an investment banker, it has too many disparate companies to attract a strategic buyer. Private equity firms that have invested in payments companies include GTCR, Lightyear Capital, and Stone Point Capital.

Write to Luisa Beltran at [email protected]


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