• Solidifies D+H as a leading global FinTech provider with a strategic
  expansion into global payments
• Continuation of D+H’s long-term growth strategy, which builds on
  strategic advances realized through Harland Financial Solutions and
  other prior acquisitions
• Deepens D+H’s U.S. customer base and broadens offering and growth
  opportunities in North America
• Expands D+H’s presence and growth opportunities in EMEA and APAC regions
• Combined base of 8,000 clients, including 8 of the top 10 and 32 of the
  world’s top 50 banks, and 190 of the top 300 U.S. banks
• Pro forma 2014 Adjusted revenues⁽¹⁾ of approximately $1.45 billion⁽²⁾ and pro forma 2014 Adjusted EBITDA⁽¹⁾ of $428 million⁽²⁾
• Expected to be accretive to Adjusted net income per share⁽¹⁾ within the first 12 months following completion of the acquisition

TORONTO, March 30, 2015 /PRNewswire/ – DH Corporation (“D+H“) (TSX: DH) today announced that it has entered into a definitive
agreement to acquire Fundtech, a leading provider of global payments
solutions to banks worldwide, for cash consideration of US$1.25 billion
(the “Acquisition“).

“The complexity of today’s global payments infrastructure, proliferation
of channels, and an increasing desire for real-time payments is driving
demand for payment solutions that allow banks to streamline payment
processing while providing a more sophisticated and comprehensive view
of liquidity management across various currencies and geographies,”
said D+H chief executive officer Gerrard Schmid. “The acquisition of
Fundtech puts D+H at the forefront of these trends globally, providing
us with a market-leading software platform with established scale in
mission-critical payment technology. It also delivers capabilities that
are relevant to our existing customer base in Canada and the U.S. while
making D+H more relevant to global financial institutions and large
U.S. banks.”

Overview of Fundtech

Headquartered in New York City, Fundtech is a leading provider of
financial technology to banks and corporations of all sizes in the
Americas, EMEA, and APAC regions with approximately 1,500 employees and 19 offices worldwide, including
development centers in the United States, India, Israel, Switzerland
and the UK. Fundtech’s solutions are mission-critical to the day-to-day
operations of banks and corporate clients. Fundtech offers a
comprehensive line of transaction banking solutions including global
and domestic payments solutions, financial messaging, corporate cash
and liquidity management and merchant services. Fundtech has
approximately 1,200 clients, including global money center banks,
mid-sized banks and credit unions, non-bank financial institutions,
central banks and corporates. Fundtech was founded in 1993 and acquired
by Chicago-based private equity firm GTCR in 2011. Fundtech’s 2014
Adjusted revenue was US$263 million⁽¹⁾ ($291 million) and Adjusted EBITDA⁽¹⁾ was US$68 million ($75 million), representing growth of 9% and 15% over
2013, respectively.

“I’m very proud of the company and culture that we have built and
believe that D+H’s client-centric approach and FinTech expertise
represent a great strategic fit for us,” said Reuven Ben Menachem,
founder and chief executive officer of Fundtech. “Fundtech joining D+H
will create new opportunities for our employees and clients alike.”

Financially, the combination of D+H and Fundtech would result in:

• Pro forma 2014 Adjusted revenues⁽¹⁾ of approximately $1.45 billion⁽²⁾;
• Pro forma 2014 Adjusted EBITDA⁽¹⁾ of $428 million⁽²⁾ with 30% Adjusted EBITDA⁽¹⁾ margin, and Adjusted net income⁽¹⁾ of $216 million⁽²⁾;
• Attractive medium-term synergies through cross-selling opportunities and
  cost savings; and
• Strong combined cash flow that will enable deleveraging, support
  dividend payments, and fund investment for future growth. D+H is
  targeting a Debt to EBITDA ratio⁽¹⁾ of less than 2.5x by the end of 2016.

Market Opportunity

D+H’s management believes that the estimated annual IT spend by banks
for all of the markets in which Fundtech participates is approximately
US$5 to US$6 billion. The market opportunity for global payments
technologies is among the most attractive in the FinTech industry
today. Market penetration of these solutions is still in the early
stages which creates significant opportunities for companies like a
combined Fundtech and D+H that have the scale, proven technology
solutions, strong banking domain knowledge and trusted client
relationships to compete in this market.

“We have made significant investments in our platforms over the last
several years to build competitive, best-of-breed solutions, and we
have seen great momentum as a result. We wrapped up a record sales year
in 2014, and our customers have been extremely positive about
Fundtech’s solutions and the value they bring to their business,” added
Ed Ho, president and chief operating officer of Fundtech. “Given the
complementary nature of our solutions, there is an opportunity for
Fundtech to leverage D+H’s established client base to continue to drive
growth. We look forward to joining D+H and to growing our business
together.”

“We’re very excited about Fundtech and believe that this transaction
will allow D+H to further strengthen our value proposition with
relevant technology solutions that appeal to our existing clients and
provide us with access to new markets and geographies,” concluded
Schmid. “With a combined base of about 8,000 clients worldwide, D+H and
Fundtech will have global scale, a comprehensive portfolio of
innovative technology solutions and capabilities to continue to execute
on D+H’s transformation as a global FinTech player.”

Acquisition Timing

Closing of the Acquisition is subject to approval under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 in the U.S. and
other customary conditions and is expected to occur during the second
quarter of fiscal 2015.

Acquisition Financing

In conjunction with the Acquisition, D+H has entered into an agreement
with a syndicate of underwriters, pursuant to which they have agreed to
purchase, on a bought deal basis, from D+H and sell to the public (the
“Offering“) (i) 16,500,000 subscription receipts (the “Subscription Receipts“), at a price of $37.95 per subscription receipt, for gross proceeds to
D+H of $626,175,000, and (ii) $200,000,000 of 5.0% extendible
convertible unsecured subordinated debentures (the “Debentures“, and together with the Subscription Receipts, the “Securities“), for aggregate gross proceeds to D+H of $826,175,000. The net
proceeds of the Offering will be used by D+H to fund a portion of the
purchase price for the Acquisition.

The Securities to be offered have not been and will not be registered
under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“) and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the U.S. Securities Act and applicable state securities
laws. This news release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the
Securities in the United States or any jurisdiction in which such
offer, solicitation or sale would be unlawful.

Concurrently with the announcement of the Acquisition, D+H obtained a
commitment letter from The Bank of Nova Scotia, Royal Bank of Canada
and Canadian Imperial Bank of Commerce (the “Credit Facility Underwriters“) for secured credit facilities in an aggregate amount of $1.858
billion and US$592.62 million (collectively, the “Credit Facilities“), $550 million and US$267.62 million or the Canadian dollar equivalent
which, in aggregate, replace D+H’s existing (i) revolving credit
facility, and (ii) non-revolving term credit facility, respectively.
The Credit Facility Underwriters, in their capacity as co-lead
arrangers of the Credit Facilities, intend to syndicate the Credit
Facilities to other financial institutions prior to the Acquisition
closing. The Credit Facilities are subject to completion of definitive
documentation which shall contain customary representations and
warranties and restrictive covenants, including compliance with certain
financial ratios, a Total Net Funded Debt to EBITDA ratio for covenant
calculation purposes and an interest coverage ratio, and restrictions
on further borrowing, acquisitions and dispositions, restrictions on
granting liens and other restrictions.

Credit Suisse acted as D+H’s financial advisor on the transaction.

Conference Call and Webcast

D+H will conduct a conference call and live webcast on March 30, 2015 at
4:15 pm (EDT). The call will be hosted by chief executive officer
Gerrard Schmid and chief financial officer Karen H. Weaver. An
accompanying slide deck will be posted in the investor section of
dh.com shortly before the call. To access the call:

• Local or international: 647-427-7450
• Toll-free within North America: 1-888-231-8191
• http://event.on24.com/r.htm?e=963428&s=1&k=A0CD94952B48DD5DD80997FE31C6E257

A replay of the call will also be available until April 13, 2015. To
access the replay:

• Local or international: 416-849-0833 (password 2684079)
• Toll-free within North America: 1-855-859-2056 (password 2684079)

The link to the webcast and an accompanying slide presentation will be
posted in the Investors section of the D+H website under Events and
Presentations at http://www.dh.com/investors/events-and-presentations/conference-calls.

About D+H

D+H (TSX: DH) is a leading financial technology provider the world’s
financial institutions rely on every day to help them grow and succeed.
Our lending, payments and enterprise solutions are trusted by nearly
7,000 banks, specialty lenders, community banks, credit unions and
governments. Headquartered in Toronto, Canada, D+H has more than 4,000
employees worldwide who are passionate about partnering with clients to
create forward-thinking solutions that fit their needs. With annual
revenues of more than $1 billion, D+H is recognized as one of the
world’s top FinTech companies on IDC Financial Insights FinTech
Rankings and American Banker‘s FinTech Forward ranking. For more information, visit dh.com.

Caution Concerning Forward Looking Statements

Certain statements contained in this news release that are not current
or historic factual statements constitute forward-looking information
within the meaning of applicable securities laws (“forward-looking statements“). Statements concerning D+H’s objectives, goals, strategies,
intentions, plans, beliefs, expectations and estimates, and the
business, operations, financial performance and condition of D+H are
forward-looking statements. The words “pro forma“, “believe”, “expect”, “anticipate”, “estimate”, “intend”, “may”,
“will”, “would” and similar expressions and the negative of such
expressions are intended to identify forward looking statements,
although not all forward-looking statements contain these identifying
words. These forward-looking statements are subject to important
assumptions, including the following specific assumptions: the ability
of D+H to meet its targets with respect to Adjusted revenues, EBITDA,
EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net
income, Adjusted net income per share, free cash flow and Debt to
EBITDA Ratio; the ability of D+H to generate sufficient cash flow to
maintain its current dividend level and also reduce debt; general
industry and economic conditions; changes in D+H’s relationship with
its customers and suppliers; pricing pressures and other competitive
factors; the anticipated effect of the Acquisition on the financial
performance of D+H; D+H’s belief that there is increased demand for next-generation global
payments solutions; the inability of legacy systems of financial
institutions to comply with the increasingly stringent regulatory
requirements thereby driving significant investment in third-party
software; financial institutions allocating an increasing percentage of
IT spend on payment hubs through third-party providers; Fundtech having
one of only a few out-of-the-box product offerings in the payment hub
and cash management industries; and the ability of D+H to achieve the
expected benefits of the Acquisition, including (i) further broadening
and diversifying D+H’s client base and operational capabilities;
(ii) accelerating D+H’s global expansion strategy with meaningful
exposure to markets outside North American; (iii) diversifying D+H’s
business in terms of product offerings as a result of the Acquisition;
(iv) broadening D+H’s sources of long-term recurring revenues following
the Acquisition Closing; (v) the benefits of the Acquisition for D+H
from an accretion and cash flow perspective (each of which may be
impacted by the realization and timing of any potential synergies and
the operating performance of D+H and Fundtech); (vi) the ability of D+H
to successfully integrate Fundtech with D+H’s existing business;
(vii) D+H’s expectations regarding enhanced revenue generation through
cross-selling opportunities; (viii) D+H’s expectation regarding minimal
ongoing capital investment and strong free cash flow conversion rate,
which D+H expects will enable deleveraging, support dividend payments
and fund investment for future growth; and (ix) D+H’s expectation that
the Acquisition will be accretive in the first twelve months following
closing.

D+H has also made certain macroeconomic and general industry assumptions
in the preparation of such forward-looking statements. While D+H
considers these factors and assumptions to be reasonable based on
information currently available, there can be no assurance that actual
results will be consistent with these forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of D+H’s business, Fundtech’s business or
developments in D+H’s industry, to differ materially from the
anticipated results, performance, achievements or developments
expressed or implied by such forward-looking statements. Risks related
to forward-looking statements include, among other things, challenges
relating to the integration of the Fundtech Business with D+H’s
existing business; failure to realize the anticipated benefits of the
Acquisition; dependence on key personnel; potential liabilities
associated with the Acquisition; D+H having a substantial amount
indebtedness after giving effect to the Acquisition; no assurance of
the future performance of the Fundtech Business; possibility that
historical and pro forma combined financial information may not be representative of our results
as a combined company; reliance on information provided by Fundtech;
the Acquisition not closing on the terms negotiated or at all; changing
government regulations in the financial services industry; inability to
accurately predict and respond to market developments or demands;
political, economic and military conditions in Israel and the Middle
East as a whole; failure to comply with the FFIEC consent order; risk
associated with marketing and the distribution of Fundtech’s products
abroad; inability to expand Fundtech’s development and support
organization; challenges relating to the uncertainty and length of a
sales cycle and the expenditure of significant resources in connection
therewith; market acceptance of Fundtech’s competitors’ products and
bank reliance on internally developed products; inability of Fundtech
to adequately protect its proprietary rights in its internally
developed technology; fluctuations in the value of world currencies;
dependence on customer retention and renewals; potential clients
electing not to replace their legacy computer systems; the availability
of certain tax benefits and government grants; increased pricing
pressures and competition which could lead to loss of contracts or
reduced margins; the ability to comply with regulations; the ability to
deliver products and services in line with the changes in the banking
and financial services industry; the ability to avoid inherent risks in
the technology industry related to cyber-security threats and breaches;
dependence on a limited number of large financial institution customers
and dependence on their acceptance of new programs; declines in the use
of personal and business cheques; strategic initiatives being
undertaken to grow D+H and Fundtech’s businesses and increase
profitability; stability and growth in the real estate, mortgage and
other lending markets; the ability to generate cash to invest in the
business and at the same time be able to pay dividends and debt
repayments; as well as general market conditions, including economic,
foreign exchange and interest rate dynamics.

Given these uncertainties, investors are cautioned not to place undue
reliance on such forward-looking statements. Forward-looking statements
are based on management’s current plans, estimates, projections,
beliefs and opinions, and D+H does not undertake any obligation to
update forward-looking statements should assumptions related to these
plans, estimates, projections, beliefs and opinions change except as
required by applicable securities laws.

All of the forward-looking statements made in this new release are
qualified by these cautionary statements and other cautionary
statements or factors contained herein, and there can be no assurance
that the actual results or developments will be realized or, even if
substantially realized, that they will have the expected consequences
to, or effects on, D+H.

Non-IFRS and Non-U.S. GAAP Financial Measures

This news release makes reference to certain non-IFRS financial
measures, in the case of D+H, or non-U.S. GAAP financial measures, in
the case of Fundtech. These non-IFRS and non-U.S. GAAP financial
measures are not recognized measures under IFRS and U.S. GAAP, as
applicable, do not have a standardized meaning prescribed by IFRS or
U.S. GAAP, as applicable, and are therefore unlikely to be comparable
to similar measures presented by other publicly traded companies, and
should not be construed as an alternative to other financial measures
determined in accordance with IFRS and U.S. GAAP, as applicable.
Rather, these financial measures are provided as additional information
to complement IFRS and U.S. GAAP financial measures by providing
further understanding of operations from management’s perspective.
Accordingly, non-IFRS and non-U.S. GAAP financial measures should never
be considered in isolation nor as a substitute to using net income as a
measure of profitability or as an alternative to the IFRS consolidated
statements of income or other IFRS or U.S. GAAP statements. Management
presents non-IFRS and non-U.S. GAAP financial measures, specifically
Adjusted revenues, EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted
EBITDA margin, Adjusted net income, Adjusted net income per share, free
cash flow and Debt to EBITDA Ratio as it believes these supplementary
disclosures provide useful additional information related to the
operating results of D+H and uses these measures of financial
performance as a supplement to the consolidated statements of income of
D+H and Fundtech.

The definitions of the non-IFRS and non-U.S. GAAP measures contained in
this news release are as follows: (i) “Adjusted revenues” is used as a
measure of performance which eliminates the impact of applying
acquisition accounting on the acquisitions of HFS and Fundtech.
Adjusted revenues are also used in calculating Adjusted EBITDA and
Adjusted EBITDA margin. Upon acquisition, the acquired deferred
revenues balances were adjusted to reflect the fair value based on
estimated costs of future delivery of the related services. These fair
value adjustments to deferred revenues, recorded as of the acquisition
date in accordance with the business combination accounting standard,
reduce revenues recognized post-acquisition under IFRS. Adjusted
revenues exclude these acquisition accounting effects. Management
believes that Adjusted revenues facilitates meaningful comparisons of
pre-acquisition and post-acquisition revenues; (ii) “EBITDA” is defined
as income from continuing operations excluding interest, taxes,
depreciation and amortization, other non-cash finance charges and fair
value adjustments of interest-rate swaps which are directly related to
interest expense, income from investment in an associate, gain on
re-measurement of the previously-held equity interest in the
Compushare, Inc. investment, and gain on sale of assets. EBITDA is also
described as income from operating activities before depreciation and
amortization in DH Corporation’s consolidated statements of income;
(iii) “EBITDA margin” is calculated as EBITDA divided by revenues; (iv)
“Adjusted EBITDA” excludes: (a) acquisition-related expenses such as
transaction costs, business integration costs and certain retention and
incentive costs incurred in connection with acquisitions; (b) charges
such as corporate development costs related to strategic acquisition
initiatives; (c) with respect to Fundtech only, costs incurred in
connection with cost-realignment initiatives; (d) costs incurred in
connection with implementing an enterprise resource planning platform
and (e) with respect to Fundtech only, fair value adjustments of
derivative instruments and certain foreign exchange gains and losses,
all of which are not considered to be part of the normal course of
operations. Adjusted EBITDA also excludes effects of acquisition
accounting on the fair value of deferred revenues and deferred costs
acquired from the acquisitions of HFS and Fundtech; (v) “Adjusted
EBITDA margin” is calculated as Adjusted EBITDA divided by Adjusted
revenues; (vi) “Adjusted net income” is used as a measure of internal
performance similar to net income, and is calculated by adjusting for
the impacts of certain non-cash items and certain items of note on an
after-tax basis. These adjustments include after-tax impacts of: the
effects of acquisition accounting on fair value of deferred revenues
and deferred costs acquired from the HFS and Fundtech acquisitions;
acquisition-related and other charges; gains and losses on sales
resulting from sale of non-strategic assets; expenses associated with
cost-realignment initiatives; discontinued operations; all of which are
not considered to be part of the normal course of operations; and,
certain non-cash items such as amortization of intangible assets from
acquisitions, gain on re-measurement of the previously-held equity
interest in Compushare, Inc., non-cash finance charges such as deferred
financing fees associated with D+H’s previous credit facilities written
off upon the refinancing in connection with acquisitions, amortization
of other deferred financing charges, accretion of convertible
debentures, fair value adjustments of interest-rate swaps, certain
foreign exchange gains and losses, and tax effects of these items and
tax effects of acquisitions; (vii) “Adjusted net income per share” is
calculated by dividing Adjusted net income for the period by the
weighted average number of shares outstanding during the period. (viii)
“free cash flow” is calculated using cash generated from operating
activities, less cash paid for interest, income taxes, capital
expenditures and dividends; and (ix) “Debt to EBITDA Ratio”: prior to
December 2, 2014, the Corporation was required to comply with Total
Funded Debt to EBITDA ratio for covenant purposes. Effective December
2, 2014, the Corporation’s previous credit facility was amended and
pursuant to the terms of the existing credit facility, the Corporation
is required to comply with Total Net Funded Debt to EBITDA ratio.
Collectively these two ratios are referred to as “Debt to EBITDA
ratio”. Total Net Funded Debt, effective December 2, 2014, includes all
of the Corporation’s outstanding indebtedness, amounts capitalized
under finance leases, bankers’ acceptances and letters of credit and is
net of cash, in North American bank accounts, up to a maximum aggregate
amount of $40 million. Convertible debentures are excluded from the Net
Debt. Total Funded Debt, applicable prior to December 2, 2014, was
calculated similar to above, except that cash was not netted. EBITDA,
for the purposes of both ratios noted above, is calculated on a
twelve-month trailing basis as net income plus: interest expense,
depreciation and amortization, income taxes and capital tax expenses,
other non-cash expenses and certain restructuring and transaction
expenses, to the extent expensed in the consolidated statements of
income. Other add-backs to net income include certain deferred revenue
changes and impacts of acquisition accounting adjustments to revenues
with respect to the HFS acquisition.

For further details on these financial measures, see D+H’s most recent
Management Discussion and Analysis for the fiscal year ended December
31, 2014, a copy of which is available on SEDAR at www.sedar.com.

See the Appendix to this news release for non-IFRS and non-U.S. GAAP
reconciliations.

__________

(1) These financial measures are not defined under IFRS. See “Non-IFRS and Non-U.S. GAAP Financial Measures” and the reconciliations in the Appendix.

(2) All dollar amounts were converted from US dollars to Canadian dollars using the following exchange rates: (i) year ended December 31, 2014: US$1.00 = CDN$1.1046; and (ii) year ended December 31, 2013: US$1.00 = CDN$1.0298.

(3) A Termination Event will have occurred if: (i) the Acquisition closing does not occur prior to 5:00 p.m. (Toronto time) on September 30, 2015; (ii) the merger agreement is terminated at any earlier time; or (iii) D+H advises the subscription receipt agent and the lead underwriters, or announces to the public, that it does not intend to proceed with the Acquisition. The date upon which such event occurs is the “Termination Date”.

SOURCE DH Corporation