FD Technologies to Sell First Derivative Business for £230 Million in Strategic Shift

FD Technologies has announced an agreement to sell its First Derivative Business to EPAM Systems, Inc. for £230 million ($290 million), marking a major step in the Northern Irish firm’s restructuring efforts.

This divestment, anticipated to close in Q4 2024, follows a strategic review that began in March. The sale is intended to sharpen the company’s focus on its KX division, which specializes in real-time analytics and AI-driven technologies.

Seamus Keating, Group CEO at FD Technologies, expressed his confidence in the decision:

“This divestment is positive for all stakeholders. 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 to shareholders.”

The deal is expected to generate net proceeds of around £205 million, after factoring in adjustments and costs. FD Technologies plans to use the funds to repay £20 million in net debt and return excess cash to shareholders, with details to be announced in November.

For the first half of fiscal year 2025, ending August 31, FD Technologies reported solid performances from both KX and the First Derivative Business. KX added £7.4 million in annual contract value, and the First Derivative Business posted revenues of approximately £79 million, consistent with the second half of the previous fiscal year.

In fiscal year 2024 (FY24), the company achieved total revenue of £248.9 million, with the KX division showing a 12% increase in revenue, reaching £79 million. Recurring revenue for KX surged 19%, now making up 86% of the division’s total revenue, compared to 81% the previous year.

Balazs Fejes, President of Global Business at EPAM, commented on the acquisition:

“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.”

The divestment is pending shareholder approval at a general meeting set for October. FD Technologies will provide updates on its strategic direction and trading performance during its interim results, due for release in November.