First Derivatives to sell majority of its stake in Quantile for €12.7m

TECHNOLOGY firm First Derivatives is selling the majority of its stake in Quantile Technologies to growth equity firm Spectrum Equity.

The stake is being sold for a cash consideration of £11m (€12.7m), representing a total gain of £10m on the initial cost of the investment, and a £7m gain on the current carrying value.

Following the sale, First Derivatives will retain a minority stake in Quantile.

In a statement yesterday, First Derivatives said the investment initially occurred as part of its strategy of assisting companies that were adopting KX technology.

KX technology enables high-performance, in-memory computing, streaming analytics and operational intelligence services and underpins Quantile’s advanced compression and risk rebalancing services.

First Derivatives said that Quantile “remains a valuable customer of the group”.

The Quantile stake was First Derivatives’ largest investment of this type, and accounted for £10m of a total of £16m of other financial assets on the group’s consolidated balance sheet as at 28 February 2020.

In the year to December 2019, Quantile reported net profit of £700,000.

The money from the sale has been received by First Derivatives and the company said proceeds will be used for general working capital purposes.

Commenting on the sale, Goodbody analyst Gerry Hennigan said: “While the partial disposal clearly represents a healthy return, the intervening success and growth also serves as an endorsement both of the Quantile platform and indirectly the underlying KX technology.”

First Derivatives saw its revenue increase over the six months to August 31, despite Covid-19 affecting economic activity around the world.

The firm reported revenue of £119.6m for the period, up 3pc year-on-year, according to interim results.