First Derivatives buys second firm in two weeks

FIRST Derivatives, the Newry-based technology company, has made its second significant overseas investment in as many weeks with a $10 million (€6.6m) acquisition of New Jersey-based software firm, Reference Data Factory (RDF).

The purchase strengthens First Derivatives’ range of financial data management- related software products and follows the company’s $7.5m investment in one of its US-based sales partners, Kx Systems – taking its stake in the company from 5% to 20% last week.

“In line with our strategy, the acquisition of RDF will further enhance the capabilities and scope of our Delta software suite. RDF has a successful track record of developing enterprise data management software,” said First Derivatives chief executive Brian Conlon.

The RDF consideration will comprise an initial payment of $2.5m, with further payments totalling $7.5m payable on the back of sales generated by RDF over the coming three years.

The US firm’s software manages securities reference data for financial institutions and has many Wall Street-based banks and credit rating agencies among its clients, including Fitch Ratings.

First Derivatives, which has its shares listed on London’s AIM and Dublin’s IEX markets, specialises in software support services for investment banks and hedge fund administrators and views RDF’s portfolio as a close fit with its own product suite.

The Newry firm also reported a strong set of first-half results last week which showed a 36.4% year-on-year jump in pre-tax profits to £3.1m (€3.39m) and a 66.3% increase in turnover to £11.4m.

For its part, RDF generated a pre-tax profit of $500,000 last year.

The company’s chief technology officer, Garry Wright said that the deal with First Derivatives will allow RDF to accelerate its plans by leveraging the Irish firm’s global presence and expertise in market data.

“We’re excited about the opportunities that this transaction provides for us. It gives us additional channels to market our systems and we’re looking forward to growing First Derivatives’ sales and consulting presence in the reference data management space.”