REG - FD Technologies PLC - Conclusion of Structure Review

FD TechnologiesAnnouncement

01/03/2024 07:00

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RNS Number : 0689F  FD Technologies PLC  01 March 2024

1 March 2024

 

FD Technologies plc

("FD Technologies", the "Company" or the "Group")

 

Conclusion of Structure Review: merger of MRP with CONTENTgine and intention
to separate KX and First Derivative

 

FD Technologies (AIM: FDP.L, Euronext Growth: FDP.I) announces an update to
its structure review announced by the Board in October 2023, which considered
the optimal organisational structure and allocation of capital to best deliver
value for shareholders.

 

A separate RNS has also been released providing an update on trading, covering
the performance of KX and First Derivative.

 

 

Structure review

The Board has been considering the appropriate structure of the Group for more
than a year, taking independent advice throughout. In October 2023 a formal
review of the options to maximise value was announced, which included
extensive consultation with shareholders and input from advisers. Following
that process, the Board has unanimously concluded that the separation of its
three businesses is in the best interest of all shareholders.

 

As a first step towards this goal the Group is pleased to announce that it has
agreed to an all-share merger of its MRP business with CONTENTgine, a provider
of B2B technology buyer insights and lead generation. Further details of this
transaction are provided below.

 

The Board will take a measured approach to the separation of KX and First
Derivative, particularly with respect to the timing of any transaction, having
regard to market conditions to ensure that a divestment of First Derivative
reflects its value. The Company looks forward to engaging closely with its
investors as the process progresses.

 

The changes announced today represent a major transformation of FD
Technologies and reflect the determination of the management and Board to
realise value for all stakeholders from a unique portfolio of businesses with
different capital needs and future opportunities. As we progress this plan, we
will review the appropriate Board composition and update the market in due
course.

 

 

Merger of MRP with CONTENTgine

FD Technologies has concluded that a highly complementary all-share merger of
its MRP business with CONTENTgine is the best decision for the Group and
creates a top-tier provider in the B2B demand generation services market.

 

CONTENTgine tracks content engagement across 650 B2B software and technology
categories, identifying which organisations have the highest propensity to
buy. The combination with MRP's enterprise demand generation products and
services will create an end-to-end provider covering the entire B2B technology
sales and marketing process. The combined customer base includes some of the
largest brands in enterprise technology and the merged business will be led by
MRP CEO Christopher Rack, assisted by the three founders of CONTENTgine.

 

For the financial year ending 28 February 2023, MRP generated revenue of
£41.5m and adjusted EBITDA of £1.4m while in the six months ending 31 August
2023 it generated revenue of £15.7m and an adjusted EBITDA loss of £0.2m. In
the second half of the financial year MRP continued to incur a loss. The
combined entity is expected to be profitable from the first quarter and
generate a cash EBITDA run-rate of £5m by the end of calendar 2024. As we
deliver scale and operational savings it is expected that profitability will
continue to grow.

 

While it is not expected to be utilised, the Group has made available a $5m
debt facility for the next 12 months to the combined business.

 

FD Technologies will own 49% of the combined entity, which will be reflected
as an associate investment rather than consolidated in Group financial
statements. The net asset value of MRP at the date of the transaction was
approximately £19m.

 

Donna Troy, Chair of FD Technologies, said: "FD Technologies has an exciting
collection of assets and at this stage in the evolution of these businesses
and against the current market valuation, it is the right decision to take
transformative action to separate them and realise value for shareholders. I
am confident we can address some of the recent short term trading issues with
the actions we have announced today in the trading statement and with focus
and input from our management and Board we will ensure we maximise the
potential across the portfolio."

 

Seamus Keating, CEO of FD Technologies, said: "The conclusion of the structure
review provides a clear path to create value for shareholders. As a first
step, we are pleased to announce the merger of MRP with CONTENTgine to create
a leader in the demand generation services market. This transaction creates a
strong, attractive business as the sector consolidates. We will now focus on
the separation of KX and First Derivative and will update shareholders as the
process progresses."

 

For further information, please contact:

 

 FD Technologies plc                            +44(0)28 3025 2242

 Seamus Keating, Chief Executive Officer        www.fdtechnologies.com (http://www.firstderivatives.com)

 Ryan Preston, Chief Financial Officer

 Ian Mitchell, Head of Investor Relations

 Investec Bank plc                              +44 (0)20 7597 5970

 (Nominated Adviser and Broker)

 Carlton Nelson

 Virginia Bull

 Goodbody (Euronext Growth Adviser and Broker)  +353 1 667 0420

 Tom Nicholson

 Don Harrington

 Jason Molins

 J.P. Morgan Cazenove (Broker)                  +44 (0)20 3493 8000

 James A. Kelly

 Mose Adigun

 FTI Consulting                                 +44 (0)20 3727 1000

 Matt Dixon

 Dwight Burden

 Victoria Caton

 

About FD Technologies

FD Technologies is a group of data-driven businesses that unlock the value of
insight, hindsight and foresight to drive organisations forward. The Group
comprises KX, which provides software to accelerate AI-driven innovation and
First Derivative, providing consulting services which drive digital
transformation in financial services and capital markets. FD Technologies
operates from 13 locations across Europe, North America and Asia Pacific, and
employs more than 2,400 people worldwide.

 

For further information, please visit www.fdtechnologies.com
(http://www.fdtechnologies.com) and www.kx.com (http://www.kx.com)

 

 

 

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