First Derivatives Acquires Software Development Firm ActivateClients

The leading financial software providers announced that it has fully acquired ActivateClients for €4.75 mln.

rp_first-derivatives-150x150.jpgAccording to a regulatory filing by First Derivatives plc, the company announced that it has acquired software developing company ActivateClients Limited for €4.75 million.

The move comes to boost FD’s software platform as ActivateClients is to provide a set of additional software products with HTML5 being mentioned explicitly as a technology which is to bring additional value. The announcement by FD states that the acquisition is expected to be earnings enhancing.

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Non-Executive Directors of FD Among the Vendors

Amongst the vendors of ActivateClients are two non-executive directors of FD – Pat Brazel and Keith MacDonald. After the acquisition, Mr Brazel, who is Chief Executive Officer CEO of ActivateClients, has been appointed as Global Head of Software Sales for FD and will step down from the Board of the Company.

The Dublin-based software developing company has been targeting financial markets and specializing in the development of applications and trading systems that increase customer engagement. First Derivatives will be leveraging the HTML5 technology which ActivateClients has developed to accelerate its roadmap through wider use of HTML5.

ActivateClients operates for clients across the broking, institutional foreign exchange and fixed income markets.

The software company has also been part of three joint ventures. The first one, ActivateAlpha is a provider of quantitative analysis software for fund and wealth managers. Active Tradercast is a web-based system to link retail traders together and provide them with research and analysis.

The third joint venture is named Enhanced Bond Analytics which is a proprietary software system designed to identify arbitrage opportunities in G7 sovereign debt markets.

The CEO of ActivateClients, Pat Brazel, commented in the announcement, “ActivateClients’ achievement has been built on the technical expertise and dedication of our team and I am sure that our products and front office development capabilities will be a significant asset to FD.”

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The CEO of FD, Brian Conlon, said in the regulatory filing announcing the move, “ActivateClients is a low-risk, earnings-enhancing acquisition for the Company that will deliver synergies on a number of levels. It provides additional technology capabilities, particularly in HTML5, and its staff possess software development skills that will be useful across a range of projects FD is working on. We welcome its staff to the Company.”

New Shares Issuance

The initial consideration for the deal is €4.75 million ($5.2 million), of which €1.5m million (£1.1m) is payable in cash and €3.25m (£2.4m) is payable through the issue of 183,185 FD new ordinary shares (the “Consideration Shares”).

Deferred consideration up to €2.0 million ($2.2 million) is payable on the achievement of agreed targets during the year, up to February 29, 2016. In its latest financial year to December 31, 2014, ActivateClients reported revenues of €1.0m and €0.2m of profit before tax.

The former CEO of Activate clients and new Global Head of Software Sales for FD, Pat Brazel, will receive 97,417 Consideration Shares. Following the acquisition he will hold 0.4 per cent of the enlarged issued capital.

Mr. MacDonald will receive 35,877 Consideration Shares, after which which he will hold 45,877 FD ordinary shares representing 0.2 per cent of the enlarged issued share capital.

FD has applied for the issuance of 183,185 Consideration Shares to be admitted to trading on AIM and ESM, and that admission will take place on March 27, 2015.

The Consideration Shares will rank pari passu with the existing shares of the Company. This means that the new shares will be on an equal footing with existing shares of the First Derivatives plc (LON:FDP).

Following the allotment, the total number issued share capital of the Company will increase to 23,165,961 ordinary shares.

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