Risk technology vendor Barra has acquired neighbouring Berkeley, Caliornia-based analytics outfit Financial Engineering Associates for $21.5 million in cash.
Closely-held FEA is a developer of derivatives and risk analytics software for traders, risk managers and financial analysts for a wide range of industries. The firm has a global client base, with over 700 clients across the US, Europe and Asia.
Operating revenues from software licensing and maintenance were approximately $8 million for its fiscal year ending February 28 2002, an increase of 50 per cent over the previous period.
FEA sells perpetual licenses for most of its products and typically charges a 20 per cent annual maintenance fee. The firm has been consistently profitable, says Barra.
Kamal Duggirala, chief executive officer of Barra, says FEA reinforces Barra's core competence in financial analytics and at the same time adds new market segments for growth.
He adds: "The combined firm will leverage FEA's impressive list of sell-side clients and market knowledge to develop a more comprehensive suite of risk analytics for both trading and portfolio management."