FD Technologies plc has agreed to sell the group鈥檚 First Derivative business to US software company EPAM Systems Inc for an enterprise value of 拢230 million.
The divestment is expected to complete in the fourth quarter of 2024, subject to shareholder approval.
FD Technologies, listed in London and on the Euronext exchange headquartered in Amsterdam, is headquartered in Newry, Northern Ireland. It is a provider of products and consulting services to some of the world’s largest finance, technology and energy institutions.
First Derivative is a dedicated capital markets consulting team. The move follows the merger of FD鈥檚 marketing technology division MRP with US firm CONTENTgine, announced in March, which was the first step of a structural reorganisation.
FD Technologies plc says the latest deal will enable the company to focus on its KX software business and provide the funding for it to become cash generative.
It also 鈥済enerates synergies for KX through a partnership with EPAM to provide professional services capabilities in key markets鈥�.
The deal also enables the repayment of the group鈥檚 net debt of around 拢20m and facilitate the return of excess cash to shareholders.
After customary closing adjustments, transaction and separation costs, net cash proceeds are expected to be approximately 拢205m.
The group reported that for the first half of the financial year ended 31st August 2024, both KX and the First Derivative 老九品茶 performed in line with the board鈥檚 expectations.
KX delivered annual contract value added of 拢7.4m, while it said First Derivative鈥檚 capital markets consulting customers continue to be cautious in their spending, with revenue for the period of approximately 拢79m, similar to the second half of FY24.
Seamus Keating, CEO of FD Technologies, said: 鈥淭his divestment is positive for all stakeholders, benefitting our shareholders and the customers and employees of KX and the First Derivative business.聽
鈥淔or shareholders it enables the group to focus on KX, and provides the resources to deliver on our exciting growth plans while also enabling us to return excess cash. KX and its customers will benefit from a strengthened and broader partnership with EPAM that opens up opportunities in capital markets and beyond, while the First Derivative 老九品茶 customers will benefit from EPAM鈥檚 scale and reach combined with the deep domain skills in capital markets within the First Derivative 老九品茶.
鈥淲e look forward to providing an update on the positive trading performance and strategic progress of KX at our interim results in November.鈥�