Swiss banking software company Avaloq prepares for 2020 sale: sources

FRANKFURT/ZURICH (Reuters) - Swiss banking software company Avaloq is starting preparations for a 2020 sale or initial public offering as its private equity shareholder Warburg Pincus seeks an exit, people close to the matter said.

The buyout group, which owns 45% of Avaloq, is expected to mandate advisers soon to handle the divestiture, the sources said, adding that an auction could launch in early 2020.

Avaloq founder Francisco Fernandez, management and employees also hold shares in the company.

Avaloq and Warburg Pincus declined to comment.

Avaloq Chief Executive Juerg Hunziger had said this year that the company was preparing for an IPO or sale within the next two to four years.

Avaloq, founded in 1985 as BZ Informatik, supplies software for financial institutions such as Barclays, BBVA, Deutsche Bank, HSBC, Rothschild, Societe Generale and Vontobel. Its software programmes manage $4.5 trillion in client money.

In the first half of 2019, Avaloq posted a 5% year-on-year increase in revenues as well as core earnings, to 288 million francs in sales and adjusted EBITDA of 38 million.

Larger and more profitable peer Temenos trades at 25 times its expected core earnings.

Reporting by Arno Schuetze and Oliver Hirt, Editing by Michael Shields