FD Technologies chair Donna Troy has urged investors to back a £541.6 million (€643.04 million) sale of the Newry-based data and analytics company to US private equity firm TA Associates at a special meeting on June 30th, saying there are risks to it delivering on its full potential as a standalone public company.
The company’s remaining business, KX, which analyses large data sets in real time to help companies predict and respond to market conditions across the various business areas, may be hampered by “uncertain public markets” if it needs to accelerate investment to capture opportunities in artificial intelligence (AI).
“Furthermore, FD Technologies is a relatively small player in a large, but fast-moving, fragmented market,” Ms Troy said in a letter to shareholders, contained in documents relating to the planned deal, published on the company’s website on Friday.
“Competing with a number of larger, very well capitalised software providers and consequently the FD Technologies, directors are cautiously aware of execution risk to delivering its strategy and the associated value to FD Technologies shareholders.”
The deal with TA Associates, first announced a month ago, follows a big restructuring at the Dublin-listed company last year. This led to the group selling its former core First Derivatives division to US software group EPAM in a £236.1 million transaction and the spin-off of another business, called MRP, into a merger. It subsequently returned £120 million to shareholders in January through a stock buyback deal.
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FD Technologies confirmed that it has secured irrevocable commitments from shareholders behind 56.7 per cent of its stock for the TA Associates deal. It will need approval from holders of 75 per cent of its shares to get the transaction over the line through the mechanism, known as a scheme of arrangement, that TA Associates is using to execute the takeover.
Shareholders are being offered the choice of taking cash for their stock or rolling their shares into the bid vehicle.
“The FD Technologies board does not give any recommendation to FD Technologies shareholders as to whether they should elect for the alternative offer [of taking shares in the bid vehicle],” the company said.
“FD Technologies shareholders should determine whether acquiring or holding rollover shares is affected by the laws or regulations of the relevant jurisdiction in which they reside and consider the advantages and disadvantages of electing for the alternative offer, and whether rollover shares are a suitable investment in light of their own personal circumstance.”
