First Derivatives continues acquisition spree, buys QuantumKDB

After last year’s acquisitions of Prelytix, ActivateClients and Affinity Systems, provider of software and consulting services First Derivatives plc (LON:FDP) today announced one more acquisition – that of QuantumKDB (UK) Limited.

FD said that it has acquired the entire issued share capital of Quantum for total consideration of up to £2.2 million, including initial consideration of £1.7 million of which £0.6 million is payable in cash and £1.1 million is payable through the issue of 72,940 new ordinary shares in FD. The acquisition is set to provide FD with complementary consultancy expertise to support the growth of its Kx business. The deal is expected to be earnings enhancing in the first full year following acquisition.

  • Acquisition rationale

QuantumLogo1Quantum was founded in 2011 by its CEO Kieran Lucid and provides Kx consulting in the UK, US and Hong Kong. The majority of its clients operate in capital markets and the acquisition will strengthen the Group’s relationship with certain key clients as well as adding to the existing customer base. Quantum has a total of 15 consultants with strong experience in Kx technology. In its latest financial year to 13 September 2015, Quantum reported profit before tax of £0.3m and had net assets of £0.25m at acquisition.

  • Terms of the Acquisition

The initial consideration for the acquisition is £1.7m of which £0.6m is payable in cash and £1.1m is payable through the issue of 72,940 new ordinary shares in FD.

Deferred consideration of up to £0.5m is payable on the achievement of certain targets on the 12 month anniversary of the acquisition.

The admission of the 72,940 Consideration Shares is set to take place on January 15, 2016. The Consideration Shares will rank pari passu with the Company’s existing ordinary shares in issue. Following this allotment, the total issued share capital of the Company will increase to 23,921,972 ordinary shares.

Kieran Lucid, Chief Executive Officer of Quantum, commented:

“As the home of Kx technology, FD is a natural fit for us. We are joining at a time of rapid expansion in the Kx client base across industry sectors, as more and more clients appreciate the benefits of this technology that has dominated capital markets for more than 10 years. We are excited about drawing on the expertise we’ve gained to assist the Group in its ambitious plans for the future.”

Brian Conlon, Chief Executive Officer of FD, commented:

“We are experiencing increasing demand for Kx skills from existing and potential customers and the acquisition of Quantum will add to our existing capabilities and support our growth plans. We welcome its staff to the Group.”

You can view the full announcement about the deal by clicking here.

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