7 April 2017
StatPro Group PLC
StatPro to acquire UBS Delta
StatPro Group plc (AIM:SOG, “StatPro”, “the Group”), the AIM listed provider of cloud-based portfolio analysis and asset pricing services for the global asset management industry, has agreed to buy from UBS, its risk and performance analytics service, UBS Delta, for approximately €13 million in cash, paid over three years.
UBS Delta will enable StatPro to extend its risk and performance analytics service from the middle office to the front office of asset managers.
The acquisition is phased over three to five years as StatPro incorporates UBS Delta’s functionality into its flagship product, StatPro Revolution.
Throughout the transition, and until StatPro has fully integrated UBS Delta’s functionality, UBS will continue to operate and support UBS Delta for its clients.
- Total consideration of €13 million in cash over three years, including initial payment of €8.7 million
- UBS Delta has annualised recurring revenues of approximately £14.5 million
- Proforma annualised recurring revenue (“ARR”) of combined operations of over £53 million
- Adjusted EBITDA from acquisition expected to be £2.0 million to £2.5 million in first 12 months
- Expected to enhance Group adjusted EPS in 2017
- UBS Delta is a cloud-based solution complementing StatPro Revolution
- Increases StatPro’s SaaS and cloud-based services to over 80% of software ARR
- Enhances StatPro’s risk services for front office
- Provides upgrade path to StatPro Revolution for UBS Delta clients
Justin Wheatley, StatPro CEO, commented:
“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.
“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 award winning UBS Delta platform will be maintained for up to the next five years while we incorporate the unique UBS Delta functionality into our flagship cloud platform, StatPro Revolution.”
Hishaam Caramanli, Global Head Securities eCommerce, UBS Investment Bank commented:
“We are incredibly proud of UBS Delta, our award winning risk and performance analytics platform, and the talented team of people that provide this service to our clients.
“We are delighted to have entered into a transaction with StatPro, a leader in this market with the technical experience and growth capital to enhance the platform and create a next generation experience for our clients.”
There will be an analyst conference call at 8.30am today – please contact Hannah Franklin at [email protected] or on telephone 020 7457 2020 for details.
|StatPro Group plc|
|Justin Wheatley, Chief Executive||+44 (0) 20 8410 9876|
|Andrew Fabian, Finance Director|
|Panmure Gordon – Nomad and Broker|
|Corporate Finance – Freddy Crossley / Fabien Holler||+44 (0) 20 7886 2500|
|Corporate Broking – Tom Salvesen|
|Adrian Duffield / Kay Larsen / Chris Birt||+44 (0) 20 7457 2020|
Goldenhill International M&A Advisors initiated this transaction and acted as financial and strategic advisor to StatPro
Terms of the transaction
StatPro will pay UBS a total of €13.05 million as follows: €8.70 million on first closing, €1.74 million on the second anniversary of first closing and €2.61 million on the third anniversary of first closing. First closing is expected to occur in mid-May 2017.
UBS Delta has annualised recurring revenues of approximately £14.5 million.
StatPro expects annual revenue levels to remain broadly similar for 2017 and will incorporate UBS Delta revenues from first closing (expected to be mid-May 2017).
StatPro expects the acquisition to be earnings enhancing in 2017.
The consideration will be entirely funded by additional committed facilities provided by Wells Fargo Capital Finance, which have been increased to £41.1 million, of which £33.6 million are committed for a new five year term to April 2022.
Under the terms of the agreement, StatPro will take on the employees and contractors of UBS Delta (of which there are currently 54 in aggregate) and associated costs during the first phase as well as the UBS Delta revenue.
Clients of UBS Delta
UBS will continue to operate and support the UBS Delta service for its clients until StatPro has enhanced its award winning performance and risk platform, StatPro Revolution, so that it reaches functional parity with the UBS Delta service.
It is estimated that this process will take approximately three years. Following that, UBS Delta clients will be able to migrate to StatPro and upgrade to the newly enhanced service.
UBS Delta capabilities
UBS Delta has proven to be best in class for risk for asset managers with a special focus on fixed income attribution and risk. The quality and precision of the analysis provided makes UBS Delta stand out. The strong team of professionals that are behind the service have the knowledge and experience to make a real difference to StatPro. The way risk and performance is used in the front office of asset managers is functionally different to the way the middle office works, which is StatPro’s traditional market. Adding UBS Delta’s capabilities broadens StatPro’s potential market.
StatPro is a global provider of award winning portfolio analytics solutions for the investment community. The Group’s cloud-based platform provides vital analysis of portfolio performance, attribution, risk and compliance. This multi-asset class analytics platform helps StatPro’s clients increase assets under management, improve client service, meet tough regulations and reduce costs.
The Group’s integrated and global data coverage includes over 3.2 million securities such as equities, bonds, mutual funds, FX rates, futures, options, OTCs, sector classifications and much else besides. StatPro also covers most families of benchmarks including MSCI, FTSE, Russell, NASDAQ and the open source Freedom Index.
StatPro has grown its Annualized Recurring Revenue from less than £1 million in 1999 to around £53 million following the acquisition of UBS Delta. The Group has operations in Europe, North America, South Africa, Asia and Australia, with hundreds of clients in 38 countries around the world. Approximately 80% of recurring revenues are generated outside the UK. StatPro Group plc shares are listed on AIM.