Avaloq
2021
$2.2B
Why
NEC agreed in October 2020 to acquire Swiss financial-software company Avaloq for about CHF 2.05 billion (roughly $2.2 billion), completing the deal in 2021 to enter the core-banking and wealth-management software market serving European financial institutions.
Impact
Avaloq gave NEC a large, established base of banking and wealth-management software customers across Europe and Asia, letting it cross-sell digital-identity and security technology to financial-services clients well beyond its traditional Japanese telecom and IT-services customer base. Together, the Northgate and Avaloq deals represent NEC's clearest strategic pivot in decades: building recurring, high-margin international software revenue to offset a maturing domestic Japanese IT-services and telecom-equipment business.
Outcome
The Avaloq deal became one of NEC's largest overseas acquisitions and a central pillar of its strategy to grow international software and SaaS revenue as domestic Japanese IT-services growth slowed.