Software and financial services provider, First Derivatives has reached an agreement with Kx Systems to acquire a 46.47% stake of Kx for a total consideration of $57.9 million (£36.0m), according to a report from the London Stock Exchange (LSE).
First Derivatives caters to the capital markets industry, helping to provide financial firms with a multitude of services. The firm most recently had its Delta Software Platform integrated by the IEX earlier this month, helping expand its influence to a wider focus.
As a result of the acquisition, First Derivatives’ holding in Kx jumped from 20.1% to 65.2% on a fully diluted basis, ultimately granting them a key threshold in ownership above the 50% margin level. Subsequently, First Derivatives expects enhanced earnings as a result of the move.
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Conversely, Kx is a California-based big data vendor, most widely known for its kdb+ product, which helps facilitate data solutions in the capital markets sector. The stock acquisition is also expected to instigate some personnel changes, namely trending towards First Derivatives.
In particular, Kx’s management team, including co-founders Arthur Whitney and Janet Lustgarten will be helping provide additional leadership roles to First Derivatives. Moreover, Ms. Lustgarten is also expected to join First Derivatives’ board.
According to Ms. Lustgarten, CEO and Co-Founder of Kx Systems in a recent comment on the move, “we have been successfully focused on Wall Street for 20 years because of the large data sets they have. Now because the Internet of Things is generating large data sets in other industries we need to grow to be able to address these new opportunities. First Derivatives, with its deep pool of engineering talent and its global footprint is the ideal partner to help accelerate our growth, scale the company and to bring kdb+ to a wider audience.”
“Having worked closely with the team at Kx Systems for more than a decade, First Derivatives understands the power and value of kdb+. Together we look forward to exploiting its capabilities to its full potential as we further penetrate the Financial Services sector and to build upon the foothold that has been established in other vertical sectors. We intend to make significant investments in Kx to allow the founders and their team to scale the company whilst staying true to its heritage. Transformational is a term often overused in the technology industry, but in this case I can confidently use it to describe the impact this transaction will have on our collective prospects,” added Brian Conlon, Chief Executive Officer of First Derivatives in an accompanying statement.