SOURCE: Xchanging

June 22, 2010 02:09 ET

XCHANGING AND SIA-SSB TO FORM AN ENTERPRISE PARTNERSHIP

LONDON--(Marketwire - June 22, 2010) -


XCHANGING AND SIA-SSB TO FORM AN ENTERPRISE PARTNERSHIP

Xchanging to enter the Italian market - an important milestone in the pan-European growth strategy

LONDON, 22 June 2010 - Xchanging (LSE: XCH), one of the largest and fastest growing global business processors, has signed a letter of intent with SIA-SSB (SIA-SSB), the European leader in financial and payment systems services, to form an Enterprise Partnership (EP). As part of this proposed EP, Xchanging will acquire 51% of Kedrios S.p.A. (Kedrios), the Italian subsidiary of SIA-SSB that specialises in securities processing and fund administration services for the Italian market. Xchanging will assume operational control of Kedrios and its 152 employees. Upon completion, Xchanging will employ over 1300 staff and process over 40 million transactions per year for more than 100 customers on its Continental European financial markets platforms.

Strategic rationale for the partnership

This EP will combine Xchanging's European expertise in securities processing and investment account administration with Kedrios' strengths in fund administration and in the Italian market. This partnership will be an important building block for the creation of a pan-European operator for securities processing, investment account administration and fund administration to blue-chip financial markets customers. In particular this partnership delivers the following benefits:

- allows Xchanging to serve its existing customers who have operations in the Italian market

- expands Xchanging's international customer base

- adds a new platform generating scale within Xchanging's financial markets operations.

Kedrios will add value to the Xchanging's entry strategy in Italy with its deep knowledge in financial services, IT and business process outsourcing, as well as its strong customer relationships and robust technology solutions.

In addition, SIA-SSB and Xchanging are assessing the possibility of leveraging Xchanging's pan-European expertise in procurement services. The EP with SIA-SSB also provides a great opportunity for Xchanging to further develop its strategic 10% investment in CAD IT, who in the future could become the software- provider for the new partnership. CAD IT is the leading securities processing software provider in Italy with about 80% market share.

David Andrews, CEO Xchanging said, "This Enterprise Partnership with SIA- SSB is a logical step in the growth strategy of Xchanging in the Continental European market for financial services as well as procurement. We have built a strong position in the securities processing and investment account administration markets in Germany and expanded procurement operations in France, Germany, Spain and the Benelux. This new partnership leverages our successful platforms and gives us future opportunities for growth in the region. It reaffirms our commitment to grow rapidly through our Enterprise Partnership model".

Massimo Arrighetti, CEO SIA-SSB said, "As a result of this partnership with leading international business processor Xchanging, we can now achieve two main goals - on the one hand expanding the range of Kedrios business services and customers and on the other hand maintaining and developing Kedrios' professional skills and technological know-how; the company's two key strengths since its creation in 2001".

Matthias Sohler, Managing Director, Continental Europe for Xchanging added, "With this market entry into Italy, we will now be able to serve our existing customers in the banking, asset management and insurance market in Italy. We are building the foundation for a large, independent financial market operator, covering all relevant aspects of a pan-European transaction bank in securities operations, investment account administration and fund administration".

Enterprise Partnership details

Revenues for Kedrios for the year ended 31 December 2009 were EUR18.0 million[1]. The impact on Xchanging's financials in 2010 is not expected to be material. Xchanging is confident that it can leverage its expertise and capabilities to grow the business as it has its other EPs. Xchanging's comprehensive processing initiatives are anticipated to yield significant savings, such that the EP is expected to break even during 2011, and deliver profits to the Group in 2012.

Xchanging will subscribe to a 51% stake in the EP through a share capital increase and invest in the EP over the next two years to re- organise the business and create a platform for future growth. Xchanging expects to grant SIA-SSB the option to sell its shareholding to Xchanging after the third anniversary of change of control.

The consideration and subsequent investments will be funded through existing cash resources. Further announcements will be made when the terms of the deal are finalised and agreed, which is expected to be in the third quarter of 2010.

About Xchanging's Continental European presence

The core of Xchanging's financial markets business is the Frankfurt based Xchanging Transaction Bank (XTB - Xchanging's EP with Deutsche Bank). XTB provides a complete range of securities processing services. Xchanging provides retail and institutional investment account administration services and an open fund platform to financial market participants in Germany through Fondsdepot Bank (Xchanging's EP with Allianz Global Investors). It is the leading independent provider of investment account administration services in Germany. By the end of 2010, Xchanging will have 1.6 million active investment accounts, EUR31 billion assets under administration and will cover approximately 100,000 individual sales agents.

- ENDS -


For further information, please contact:

Xchanging - Group PR

UK - Cardew Group
Tel: +44 (0)20 7930 0777
xchanging@cardewgroup.com

Xchanging - Continental Europe

Christiane Kampling, Continental Europe
Tel: +49 (0) 69 12 0 12 60243
christiane.kampling@xchanging.com

Lob Media Relations
Tel. +39 02 92870 280
Giangiuseppe Bianchi,
gbianchi@lobcom.it

Alessandro Gelmi
agelmi@lobcom.it

Heller & Partner
Andreas Schneider
Tel: +49 (0)89 45710 330
as@heller-partner.de

SIA-SSB

Sofia Masiello, Group Communication Director
Tel: +39 (02) 6084 2492
sofia.masiello@siassb.eu

Filippo Fantasia, Media Coordination
Tel: +39 (02) 6084 2833
filippo.fantasia@siassb.eu

About Xchanging

Xchanging is one of the largest and fastest growing business processors. With a wide range of multinational customers in 42 countries and employing over 8,000 people, we are a truly global company. Our aim is simply to provide business processing services better, cheaper and faster.

Xchanging provides procurement, accounting, human resources and technology services across industries. These include banking, insurance, manufacturing, retail and real estate among others. We combine functional expertise with deep industry domain knowledge to provide industry-specific outcomes for our customers.

Listed on the London Stock Exchange in 2007, the company is in the FTSE250, the index of mid-capitalised companies traded on the London Stock Exchange. Xchanging is also a member of the FTSE4Good index which measures the performance of companies that meet globally recognised corporate responsibility standards.

www.xchanging.com

About SIA-SSB

SIA-SSB, European leader in financial and payment systems services, provides solutions to the international financial community in the areas of credit and debit card processing, payment systems, capital markets and network services for connectivity and messaging. SIA-SSB Group currently operates in 30 countries and has subsidiaries in Belgium, Hungary and South Africa.

With 7 billion transactions annually - relating to cards, collections and payments - 61.7 million cards managed and 7.5 billion deals processed on financial markets, SIA-SSB carries 11.1 thousand billion bytes of data on the network.

SIA-SSB Group is made up of seven companies: the parent company SIA- SSB, the Italian subsidiaries Kedrios (back-office and reporting services), RA Computer (solutions and applications for banks, businesses and P.A.) and TSP (systems and services for companies and P.A.), SiNSYS (card processing) in Belgium, Perago (infrastructures for central banks) in South Africa, and GBC (card processing and ATM/POS terminal management) in Hungary.

For more information, go to: www.siassb.eu

About Kedrios

Kedrios, a SIA-SSB Group company, specialises in the design, development and offering of IT and administrative services for financial market players. The know-how gained in significant projects has allowed Kedrios to present itself as a partner capable of sharing with the Client a valid business process model for the outsourcing of front and back office activities. The offering is completed with market data dissemination services. The attention Kedrios pays to market evolutions has promoted the development of Market Abuse and MiFID solutions. The company employs 152 professionals and has offices in Milan and Rome.

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[1] This excludes revenues from a business unit that was disposed of in March 2010.


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Source: Xchanging via Thomson Reuters ONE

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