LONDON: FD Technologies (AIM: FDP.L) has entered into an agreement to sell the Group’s First Derivative Business to EPAM Systems Inc. for an enterprise value of £230m.

The divestment is expected to complete in the fourth quarter of 2024, subject to shareholder approval, amongst other things.

Seamus Keating, CEO of FD Technologies, said: “This Divestment is positive for all stakeholders, benefitting our shareholders and the customers and employees of KX and the First Derivative Business.

For shareholders it enables the Group to focus on KX, and provides the resources to deliver on our exciting growth plans while also enabling us to return excess cash. KX and its customers will benefit from a strengthened and broader partnership with EPAM that opens up opportunities in capital markets and beyond, while the First Derivative Business customers will benefit from EPAM’s scale and reach combined with the deep domain skills in capital markets within the First Derivative Business.

We look forward to providing an update on the positive trading performance and strategic progress of KX at our interim results in November.”

Balazs Fejes, President of Global Business and Chief Revenue Officer at EPAM, said: “Bringing together the First Derivative Business and EPAM marks the beginning of a distinctive enterprise that will not only enhance value for our clients but also foster substantial growth opportunities for our teams.

Leveraging their strong Business and Technology services heritage, especially in capital markets, allows us to expand our financial services solutions portfolio to our clients, who need to evolve and scale their digital ecosystems, gain greater data insights and enhance operations while minimising risks and maintaining regulatory compliance.

And we are enthusiastic about enhancing our partnership with KX, focusing significant resources to strengthen this collaboration.”

For the first half of the FD Technologies’ financial year ended 31 August 2024 both KX and the First Derivative Business performed in line with the Board’s expectations.

KX delivered annual contract value (“ACV”) added of £7.4m, within the guidance of £6m-£8m for the period. The Board reiterates its expectation of a range of £16m-£18m ACV added in FY25, driving ARR growth of 11-15% at constant currency.

The First Derivative Business’ capital markets consulting customers continue to be cautious in their spending, with revenue for the period of approximately £79m, similar to the second half of FY24.