Patsystems is pleased to announce that it has entered into a conditional agreement to acquire Mixit Inc, a US based developer and vendor of sell-side Order Management Systems (OMS) and Execution Management Systems (EMS) for equities and options trading (the “Acquisition”).
Benefits of the Acquisition include:
• adds further product and asset classes to the Group, particularly equities;
• increases scale in structurally growing market;
• increases Group percentage of recurring revenue;
• opportunity for revenue synergies from cross selling Mixit product through Patsystems’ international sales network;
• routing of Mixit customers’ futures trades to Patsystems’ global network of derivatives market connections; and
• the acquisition is expected to be earnings accretive in first full financial year of ownership.
Mixit financial information:
• For the financial year ended 31 March 2011 Mixit reported turnover of US$9.2 million, adjusted EBITDA of US$0.9 million and adjusted PBT of US$0.6 million;
• revenue CAGR for the three years ended 31 March 2011 of 37 percent; and
• has been funded without outside funding from financial institutions since inception.
Consideration for the Acquisition:
• initial consideration of £12.57 million;
• maximum possible consideration of £17.57 million payable, depending on the financial performance of Mixit for the year ending 31 March 2012; and
• initial consideration satisfied as to £8.5 million in cash and by the issue of 17.7million new Ordinary Shares (representing 8.6% of the enlarged issued share capital of the Company).
Cash element of initial consideration funded as to £4.35 million by new banking facilities from Barclays and as to £4.15 million from existing cash resources.
David Webber, Chief Executive of Patsystems, commented:
“Mixit has rapidly established itself as a significant vendor in the North American equities OMS market. I am excited by the growth opportunities that the Group will see from repeating Mixit’s success globally and leveraging the combined strengths of our technology and connectivity offerings.”
Walter Fitzgerald, President & Chief Executive Officer of Mixit, commented:
“We are extremely excited to be joining Patsystems. The combination of these two complementary, industry-leading technology firms creates a powerful global offering of products and services. Our mutual customers will benefit from the broad range of products, an international presence, and our combined strength. Patsystems’ existing global footprint along with Mixit’s extensive network provides the infrastructure for our products to be distributed seamlessly worldwide and offer clients access to global multi-asset electronic trading technology.”