StatPro to acquire UBS Delta

AIM-listed tech firm StatPro Group announced on Friday that it has agreed to buy UBS's risk and performance analytics service UBS Delta for €13m (£11m) in cash, sending shares up 10% and reversing the 18% drop it's seen so far in 2017.

The deal is immediately revenue and earnings enhancing for SOG, adding annualised recurring revenues of £14.5m, £2-£2.5m to adj EBITDA, and is expected to increase EPS in 2017. This is prior to any operational gearing, upselling, and efficiency synergies that could come from the move.

The acquisition will initially cost €8.7m (£7.4m) in cash, followed by a further €4.3m over the next three years. This seems like a fair price, at about 2.5x EBITDA upfront, followed by smaller payments whilst Delta is contributing to earnings.

StatPro Group will have ARR (annualised recurring revenue) of around £53m, a significant boost to its current 2017 and 2018 consensus figures of around £40m and £43m.

The cloud-based portfolio analysis and asset pricing firm said UBS Delta would enable StatPro to extend its risk and performance analytics service, with the move phased over three to five years to enable StatPro to incorporate UBS Delta's functionality into StatPro Revolution, it's primary product.

CEO Justin Wheatley said the earnings enhancing acquisition transformed SOG's scale and capabilities:

"It will also enable us to build a bigger business faster and, through our operational gearing, improve our profitability."

He added that the firm will have a significantly enhanced product capability for the front office, and will benefit from being able to access UBS Delta's clients, most 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."