Beyond providing technology services to the financial sector, First Derivatives has been actively expanding its product base to provide solutions to other industry verticals. Their main initiative has been the expansion of big data analysis services. Within the financial industry, this technology is used to provide brokers with dynamic real time aggregation and distribution of pricing and data. The offering was boosted through their acquisition of a majority stake in Kx Systems.
Expanding their data services, First Derivatives launched the Delta Marketing Cloud in January to enter the marketing industry. Since then, First Derivatives has continued its big data initiatives through the raising of over $22 million in a secondary share deal which led to their $20 million acquisition of data analytics firm Prelytix in February.
Continuing their M&A streak, First Derivatives has announced today that they are acquiring Canadian Affinity Systems for up to £7.7 million. A provider of software development and consultancy services, Affinity System has also recently released a solution to addresses enterprise big data challenges. For First Derivatives the acquisition will expand their software and consultancy services, as well as put them in position to enter the Internet of Things (IoT) market in the utilities, healthcare sector and their core financial industry.
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The deal comes as the firms had had a previous connection due to Affinity becoming a sales and training partner of Kx Systems in February 2014. Beyond their business services, Affinity brings to First Derivatives its existing customer base which includes utility firms New Brunswick Power and London Hydro. The firm has also been involved in the creation cycle of IoT connected products such as smart utility meters and overall software needed to manage them.
In the year ending June 2014, Affinity reported earnings before tax of £0.2 million on £2.3 million of revenues. Terms of the deal are a payment of £2.8 million in cash and £0.9 million in shares. First Derivatives will also be providing deffered compesnsation up to £4.0m in cash or shares based on revenue targets being met.
Following completion of the acquisition, joint Affinity Systems Managing Directors, Leslie Goldsmith and Hugh Hyndman will remain in their current roles. Commenting on the deal, Leslie Goldsmith stated “Affinity differentiates itself on its deep domain knowledge and its ability to solve complex problems through the development of well-architected solutions. In recent years this has led us deeper into big data applications with low latency challenges. Through our relationship with Kx Systems, we have been able to create products that leverage the power of kdb+ to ingest and analyse vast quantities of data across a number of vertical sectors.”