The Boards of Financial Objects and Raft strongly believe that the prospects for the two companies as an enlarged business would be greater than as independent businesses. The acquisition will provide the Enlarged Group with both critical mass and greater credibility, which will allow the Enlarged Group to compete more successfully for new business through combined distribution channels, notably in the UK, the US and Scandinavia. Amongst other things, the acquisition will provide the Enlarged Group with a range of risk management software products already developed, implemented and proven with a number of major international banks.
Roger Foster, chairman and chief executive of Financial Objects, said: "The acquisition of Raft marks the completion of an important phase of Financial Objects' strategy to achieve the size and credibility necessary to be a significant player in the provision of software products and services to the banking and financial services market.
"Following the acquisition, the Enlarged Group is expected to have significant revenues, employ some 300 people and have a large 'blue chip' international client base of banks and financial services organisations.
"We believe that the Enlarged Group will be the market leader in the supply of a comprehensive product range based upon the advanced technology Microsoft platform. We believe that these 'component based' products, backed by our offshore development centre in Bangalore, will give us a significant competitive edge in the market."
Risk management is considered by the Directors of Financial Objects to be a high growth sector of the market over the next few years. The combined client bases of Financial Objects and Raft will provide a significant cross selling opportunity for the Enlarged Group's wide range of advanced technology products. As a result, the Directors of Financial Objects believe that the Enlarged Group will be better positioned and will have greater scale to exploit the business opportunities which they believe are arising within its markets.
David Priestley, executive chairman of Raft, said: "Raft has a world class set of applications for Credit and Operational Risk and an excellent 'blue chip' customer base in the Energy and Financial markets. Our products are suited to blue chip multinational organisations operating in multiple locations across the world's commercial business and financial centres.
"Financial Objects' substantial Banking customer base and largely complementary product offerings will provide many excellent opportunities to extend the range and depth of the clientele for Raft products as well as providing additional opportunities for the sale of Financial Objects' products. We also believe the Enlarged Group will be ideally positioned to benefit from the predicted increase in the Risk Management market."
Financial Objects was founded in 1996 and is focused on providing software and related services to financial services organisations. The Financial Objects Group has extensive expertise in the provision of core banking systems and now has 147 significant active client sites using its software in more than 36 different countries. These clients range from large global institutions to domestic organisations servicing niche sectors in their home markets. The Company's shares are traded on AIM, a market of the London Stock Exchange, and the Company has over 250 staff globally. It operates from offices in London, New York, Hong Kong, Singapore, Luxembourg and Prague, and has an offshore development centre in Bangalore.
On 24 May 2005, Financial Objects announced the completion of its acquisition of WMS, the AIM listed supplier of wealth management software solutions including, inter alia, investment software services, property asset management and financial adviser services. Financial Objects' main products are activebank (including the WMS wealth management products) and IBIS S2. Financial Objects is a Microsoft Golf Certified Partner for software products.
The Raft Group, which commenced trading in 1995 and was admitted to AIM in 2000, provides software for the credit risk and operational risk markets. The principal sector of focus for the Raft credit risk product is currently the energy market with clients in Europe and the US, while the Raft radar product for operational risk operates at the top end of the banking market with a number of prestigious Tier 1 bank clients.
Raft also has a professional services business which provides IT services to a variety of financial institutions including major banks and stock exchanges. This IT services business is significant and accounts for approximately 50 per cent. of Raft's revenues. Raft is headquartered in London with offices in Copenhagen and Houston. The Raft Group employs approximately 70 staff.