StatPro Group PLC (LON:SOG) has agreed to pay £11mln (€13mln) for risk and performance analytics service, UBS Delta - a deal that will be immediately earnings enhancing.
Financially, the transaction is a significant one for the AIM-listed group adding annual revenues of £14.5mln, giving combined sales of £53mln. Adjusted EBITDA from the acquisition is forecast to be in the order of £2-£2.5mln.
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"This earnings enhancing acquisition transforms our scale and capabilities. It will also enable us to build a bigger business faster and, through our operational gearing, improve our profitability,” said StatPro chief executive Justin Wheatley.
"We will have a significantly enhanced product capability for the front office and will materially benefit from being able to access UBS Delta's clients - the majority of which are new to StatPro.”
The acquisition, to be phased over three to five years, will extend the company’s analytics service from the middle office to the front office of asset managers.
Throughout the transition, and until StatPro has fully integrated Delta's functionality, UBS will continue to operate and support the platform for its clients.
Shares up 12%
The shares, up 35% in the last year, advanced 12% to 100.49p on news of the deal.
“[It] not only a boost to earnings but creates a broader platform for StatPro to accelerate its cloud strategy,” said Sanjay Jha of broker Panmure Gordon.
He rates the shares buy up to 190p and has increased his earnings per share forecasts for the 2017-19 period by 30%-81%, leaving the stock trading at just 10x 2019 EPS.
On a multiple of sales, the stock is changing hands at a 50%-plus discount to the fintech sector.
Adds broker comment and share price