UK derivatives trading ASP Ffastfill has made an offer to acquire Exchange Systems Technology (EST), a London-based provider of back office technology, for a total consideration of £4.8 million in cash and stock.
Ffastfill has offered to pay £4.2 million in cash on completion of the deal and allot up to 8.6 million consideration shares. The cash element of the consideration will be funded by the placing of 78.6 million shares at seven pence a share, which will raise £5.5 million.
EST's products include its back-office clearing and settlements system Eclipse and margin calculator service, MarginClick. The firm also supplies a securities processing system that it acquired when it bought out Sam Group in 2005.
In the year ended 31 March 2007 EST generated revenues of £3.2 million and made a loss before tax of £0.2 million. Its current order book for the current financial year to 31 March 2008 amounts to £2.4 million.
Ffastfill says EST's back office products are complementary to its current offerings and will provide it with a product set significantly earlier and more cost effectively than if the company were to develop the functionality in-house.
Keith Todd, Ffastfill chairman and chief executive, says: "The acquisition of EST is a transformational transaction that will accelerate Ffastfill's growth and fulfil an important strategic requirement by combining Ffastfill's front office capability with EST's back-office solutions."
News of the offer comes as Ffastfill reports a 27.6% turnover to £6.063 million for the year ended 31 March 2007. The vendor posted Ebitda of just £6,000, compared to a loss of £2.230 million a year ago.