The Finextra50 Financial Technology Index held steady last week, with acquisition news and rumours driving up share prices for Patsystems and SSP Holdings. Other gainers include 3i Infotech and Interactive Data, while Fidelity NIS led the fallers.
UK-based derivatives trading platform vendor Patsystems saw its share price rise 19.40% to 23.88p last week, making it the index's best performer. Rumours were circulating that fixed income trading system vendor ION Trading was about to finally acquire Patsystems outright, after gradually building up a 29% stake in the AIM-listed company. Its most recent transaction was in early June when it purchased an additional 4,125,000 shares.
It was reported last week that ION Trading had acquired privately held middle and back office systems provider Rolfe & Nolan (R&N) for around £47 million.
Private equity firms TA Associates and Kairos Partners are investors in ION Trading. An acquisition of Patsystems would continue a roll-up play by the company, which began acquiring firms in its core fixed-income space with the 2005 acquisition of Aurora Software, followed by fixed income analytics firm Finvision Financial Systems. In 2006 it added securities lending and repo capabilities with Anvil Software.
Rolfe & Nolan brings it strong middle and back-office capabilites in exchange traded derivatives, and Patsystems would strengthen and complement this with its extensive exchange connectivity and routing technology.
Continuing the UK-based M&A action, last week saw shares in insurance IT specialist Software Solution Partnership (SSP Holdings) rise 16.46% to close Friday at 184p. On Wednesday it announced it has agreed a 190p per share cash offer for the company by a special vehicle of buyout firm Hellman & Friedman.
This announcement came as it unveiled full-year results ahead of its expectations. Pretax profits for the year to end-March rose to £8.8 million, helped by good growth in both broking and insurance company systems, from £6.4 million pounds the previous year. Year-on year revenue growth was 67% , rising to £64.4 million.
The offer by H&F Sensor Bidco values SSP at approximately £161.6 million.
3i Infotech rose on strong first quarter results. It shares closed Friday up 15.45% to Rs108 after it posted net profit growth of 44.1% to Rs403 million for the quarter. Within this period the BPO and services provider acquired US-based Regulus Group and also acquired 26% of Locuz Enterprise solutions and 51% in FinEng Solutions.
Interactive Data was up 12.39% to $28.03 after posting postitive Q2 results: revenue increased 9.5% to $186.1 million and net income was up 15.1% to $33.5 million on the year ago quarter.
Vasco Data Security was up 11.96% to $13.29 after posting Q2 revenue up 9% to $35.4 million, and net income up 9% to $7.5 million on the year ago quarter.
Other firms that rose last week include:
Few companies saw any significant falls last week. Fidelity National Information Services, closed Friday down 6.14% to $19.56, while The Innovation Group and Nucleus Software fell 4.17% to 17.25p and 4.04% to Rs178.00 respectively.
More information on the Finextra50 Financial Technology Index methodology and constituent stocks can be found here.