First Derivatives buys in Kx skills with QuantumKDB acquisition

First Derivatives buys in Kx skills with QuantumKDB acquisition

First Derivatives has acquired specialist Kx consultancy QuantumKDB for £2.2 million as it looks to support the growth of its database software business following a management shakeup in November last year.

Quantum was founded in 2011 by its CEO Kieran Lucid and provides consultancy services to capital markets firms in the UK, US and Hong Kong. The company boasts a 15-strong team of experienced Kx consultants.

In its latest financial year to 13 September 2015, Quantum reported profit before tax of £0.3m and had net assets of £0.25m at acquisition.

Fist Derivatives has bought the business for an initial consideration of £1.7 million in a mixture of cash and shares, rising to £2.2 million on performance-related targets. The tie-up is expected to add c.£1m of revenue and £0.3m of PBT per annum to First Derivates' bottomline from FY17 onwards

In November, First Derivates undertake a management reshuffle at its Kx Systems subsidiary following a strategic review, moving co-founder and CEO Janet Lustgarten to the chairmanship and installing FD chief Brian Conlon as CEO and market strategy lead Mark Sykes as COO.

Says Conlon: “We are experiencing increasing demand for Kx skills from existing and potential customers and the acquisition of Quantum will add to our existing capabilities and support our growth plans.”

The news has been well received in the markets. Describing the deal as an 'acquihire' analysts at Investec say the takeover will provide "coveted Kx skills that are difficult to source. While not especially material, we take the deal as generally inferring that demand for the database software side of the group is healthy, necessitating extra niche consulting resources."

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