Newry’s FD Technologies sells unit to US firm in a deal worth almost €275m

FD Technologies announced today that it would sell its First Derivative business to EPAM Systems for £230m (€274.1m).

The company, then known as First Derivatives, was founded in 1996 by the late Brian Conlon, who financed the company with a £5,000 loan from the Newry Credit Union.

It provides consulting services for capital markets, and has staff based in a string of global centres from London to Singapore, as well as its base in Newry

The sale of the unit must be approved by shareholders in the publicly-listed company before being completed.

First Derivative is a subsidiary company of FD Technologies Group, which also owns KX. The parent company is publicly listed on AIM, the London Stock Exchange’s market for “small and medium size growth companies”.

In an update issued on Monday morning, the company said the sale would allow it to focus on its KX business, as well as to clear £20m in debt.

It added that it was focusing the business on KX, their data analytics and AI company, as it had the “largest value creation potential”.

By turning their focus to KX, FD Technologies hope to make it cash generative, as well as to grow it in target markets.

Monday’s update further said that the group had “performed in line with the board’s expectations” in the financial year up to August.

However it noted that First Derivative’s capital markets consulting customers “continue to be cautious in their spending”.

Seamus Keating, CEO of FD Technologies, said: “This divestment is positive for all stakeholders, benefiting our shareholders and the customers and employees of KX and the First Derivative business.

"For shareholders it enables the group to focus on KX, and provides the resources to deliver on our exciting growth plans while also enabling us to return excess cash.

"KX and its customers will benefit from a strengthened and broader partnership with EPAM that opens up opportunities in capital markets and beyond, while the First Derivative business customers will benefit from EPAM’s scale and reach combined with the deep domain skills in capital markets within the First Derivative business.

"We look forward to providing an update on the positive trading performance and strategic progress of KX at our interim results in November.”

EPAM Systems are an American software company which has locations on five continents. FD Technologies say the sale will create “synergies for KX”.

Balazs Fejes, president of global business and chief revenue officer at EPAM, said: “Bringing together the First Derivative Business and EPAM marks the beginning of a distinctive enterprise that will not only enhance value for our clients but also foster substantial growth opportunities for our teams.

"Leveraging their strong business and technology services heritage, especially in capital markets, allows us to expand our financial services solutions portfolio to our clients, who need to evolve and scale their digital ecosystems, gain greater data insights and enhance operations while minimising risks and maintaining regulatory compliance.

"And we are enthusiastic about enhancing our partnership with KX, focusing significant resources to strengthen this collaboration.”

Reporting on:independent.ie