First Derivatives agrees to buy out minority shareholders of Kx Systems

Maria Nikolova

The aggregate consideration is $53.8 million in cash, to be financed from FD’s available facilities.

First Derivatives plc (LON:FDP) has earlier today announced that it has reached agreement with the minority shareholders of its subsidiary Kx Systems, Inc., regarding the acquisition by FD of their entire remaining shareholding.

The finalization of the transaction is expected on or before June 29, 2019. Once the transaction is completed FD will own 100% of the issued share capital of Kx Systems.

Under the terms of the deal, First Derivatives has agreed to acquire the remaining 600,022 Kx Systems shares that it does not already own from the minority shareholders, namely Arthur Whitney and Janet Lustgarten, who are co-founders and current directors of Kx Systems, and their associated persons.

The aggregate consideration is $53.8 million in cash, to be financed from FD’s available facilities. The terms of the transaction are in line with those agreed between FD and the minority shareholders in October 2014, and include a payment of $12 million in lieu of anticipated dividends to the minority shareholders for the period up to October 31, 2021.

Brian Conlon, Chief Executive Officer of FD, says:

“Since we acquired a controlling interest in Kx Systems in October 2014 we have invested heavily across our business to target multiple new industries. The agreement to acquire 100% of Kx Systems provides certainty for the Group and its shareholders as we seek to realise the considerable potential we see for further growth.”

FD’s proprietary Kx technology captures and analyses vast quantities of data, both real-time and historic. Kx comprises the kdb+ database and an enterprise layer providing vital functions such as control and visualisation. Together they provide a platform that enables organisations to meet various data challenges they face, with an efficient design. These core capabilities, along with the capacity to operate on the chip, edge or cloud delivers a compelling solution for FD’s clients. The software has been deployed for edge computing to public environments such as AWS, Azure and the Google cloud.

The preliminary results for the year ended February 28, 2018 have shown that revenue from FD’s most mature market, FinTech, increased by 22% to £142.9 million. Revenue from MarTech increased by 24% to £38.2 million. In this market, FD leverages the power of Kx to deliver a full B2B account-based marketing platform, with an emphasis on predictive analytics using intent data from Internet search.

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