Bravura Solutions, a global supplier of transfer agency and wealth management software applications and professional services, is undertaking a fully underwritten rights issue in order to raise funds to assist in the acquisition of Mutual Fund Technologies (MFT), a provider of transfer agency services, predominantly in Europe.
Bravura has entered into a Sale and Purchase Agreement (SPA) for the acquisition of all the shares in MFT with a cash consideration of GBP19 million to be paid on completion, and two deferred cash payments by way of earn out for another GBP500,000 each subject to reaching relevant revenue hurdles.
“This agreement represents a significant step in furthering Bravura’s presence in the transfer agency market in Europe," says Bravura’s Group CEO, Simon Woodfull (pictured). "This acquisition will deliver benefits that include increased market share, improved predictability of earnings and a broader capability to deliver to our customer’s sophisticated and growing requirements”.
Completion of the acquisition is subject to satisfactory completion or waiver of the conditions of the acquisition, and is expected to occur shortly after allotment of the shares to be issued under the rights issue., which is fully underwritten by Ironbridge Fund II entities (or their subsidiaries) managed or advised by Ironbridge Capital Pty Limited.The rights issue will close on 5pm Monday 7 June 2010.
The acquisition is expected to be EPS accretive and highly cash generative due to long term annuity revenue streams. Following the acquisition of MFT, three of the top five UK fund managers (by funds under management) will run on Bravura transfer agency platforms.
As part of the transaction, Bravura will acquire MFT’s GFAS (Global Funds Administration System) software solution. Before completion, MFT will also enter into service agreements with its existing providers, who will continue to provide a data centre, certain software hosting and related maintenance services, support and back-up to MFT after completion of the acquisition.
MFT operates in the transfer agency market, one of Bravura’s two core focus areas – the other being wealth management. The acquisition will add to, and create further scale in, Bravura’s transfer agency client base and leverage possible cross-sell opportunities. MFT has long term contracts with some of the largest UK fund managers.
The acquisition will improve efficiency and optimise product development and support resources across functionally similar software platforms. MFT and Bravura clients will benefit from a broader range of products and services, and the support of a global organisation.
There will be minimal disruption to MFT’s existing client base and to MFT’s operations as transitioning employees will remain in their current location and reporting lines within the business will remain unchanged.