LONDON: Gresham Technologies has completed the acquisition of the entire issued share capital of Inforalgo Information Technology Limited on 28 July 2020 for a total consideration of up to £3.6 million, comprising initial consideration of £2.3 million and deferred consideration of up to £1.3 million, a news release said.
The acquisition is expected to be immediately earnings enhancing although not materially so for FY20 and adds cloud-based financial markets integration solutions to Gresham’s portfolio of Clareti applications, thus increasing the Group’s addressable market.
The acquisition has a clear financial rationale and supports Gresham’s strategic plan to create a global enterprise financial technology business.
Highlights of the Acquisition are as follows:
- Adds over £1.2 million of annualised recurring revenues (“ARR”), bringing total Clareti ARR upon acquisition to £11.9 million.
- Expected to be earnings enhancing within the first full financial year following Acquisition.
- Acquires approximately 30 new customers, comprising global banks, asset managers, market participants and market access providers.
- Enlarges Gresham’s customer footprint in North America, which accounts for 88% of the acquired ARR.
- Complements and expands Gresham’s existing regulatory data quality and exception management solutions and creates an opportunity to sell higher-value end-to-end regulatory solutions.
- Extends Gresham’s existing portfolio of cloud connectivity services and integration adaptors.
- Adds 18 staff with deep expertise in complex financial markets integration, straight-through-processing and secure cloud hosting solutions.
Inforalgo, based in Solihull, UK are specialists in connectivity and intelligent automation solutions for financial services institutions enabling straight through processing and real-time regulatory reporting. Inforalgo’s in-house developed integrated toolkit, provided as a hosted managed cloud service or on-premise solution, includes over 80 adaptors enabling rapid integration to market venues, traders and exchanges.
In the year ended 31 March 2020, Inforalgo generated revenues of £1.4 million, of which almost £1.2 million was recurring software revenue and recorded a statutory loss of £0.5 million. For the same annual reported period Inforalgo recorded an adjusted EBITDA marginally ahead of breakeven, after being adjusted to remove exceptional one-off items and non-recurring management charges from the selling shareholders. Inforalgo had gross assets as at 31 March 2020 of £0.3 million.
Ian Manocha, Gresham CEO, commented: “This exciting deal will enable us to extend our portfolio of Clareti cloud connectivity services to include further trading and regulatory reporting venues alongside our bank, ERP and financial messaging connectivity services. It strengthens our capability to offer end-to-end control of regulatory reporting for our customers, enhances our US footprint and creates cross and upselling opportunities, and builds our recurring revenue base.”
I take the opportunity to extend a very warm welcome to the Inforalgo team and customers, and we look forward to building together on their successes in the market.”
Phil Flood, Chief Commercial Officer, Inforalgo, commented: “Financial markets are experiencing increasing levels of regulatory reporting as well as demands to increase the speed of reporting. Joining with Gresham will enable us to take our innovative real-time regulatory reporting offerings to a global market and enable our customers to access the full power of the Clareti platform to provide confidence in their data.”
John Wilson, Chief Operations Officer, Inforalgo, commented: “Gresham has a deep understanding of financial markets, modern software development processes and cloud service delivery models. They also share our passion for exemplary customer support and understand the needs of global customers. We are delighted to be joining Gresham.”