As part of the agreement Bravura has acquired Citiâs Warsaw-based transfer agency software platform (including its employees) for consideration of US$21 million (A$31.99 million). The acquisition is expected to be EPS accretive in FY09 and beyond, and generate strong recurring revenues and cash flow. The acquisition was funded using current facilities and the operating cash flows generated by the business over a three year period.
This mutually beneficial agreement will strengthen Bravuraâs position as the largest transfer agency application provider in Europe and will enable Citiâs Securities and Fund Services business to better meet evolving client needs relating to transfer agency services and distribution support. Citiâs Global Transaction Services offers integrated cash management, trade, and securities and fund services to multinational corporations, financial institutions and public sector organisations around the world.
The deal will deliver significant strategic benefits to Bravura. These include greater global reach, with a larger footprint in Eastern Europe, and an extension of Bravuraâs knowledge base and expertise in the transfer agency market. It will cement Bravuraâs position as the largest transfer agency application provider in Europe - in keeping with its vision of being the leading wealth management solutions provider outside of the US.
Commenting on the alliance, Bernard Hanratty, Managing Director, Head of Citiâs Fund Services in Europe, the Middle East and Africa, said:
âThis agreement benefits all parties â Citi, our clients, our employees and Bravura. Given that the technology requirements in this market continue to increase in complexity, we are pleased to be working with a best-in-class technology and client support provider with a strong reputation for innovation and product development in the Transfer Agency field. Additionally, Bravura will offer the affected employees stronger career growth potential. For Citi, this will result in reduced operating expenses while providing the long-term infrastructure to enable us to meet the growing geographic scope and sophistication of our clients distribution needs.â
Bravura Group CEO and Managing Director, Iain Dunstan said:
âThis agreement represents a significant step in furthering Bravuraâs geographical and product reach and continues Bravuraâs successful practice of supporting the financial services industry. This relationship will assist us in growing our customer base, increasing the scope of our product range and increasing our capability to deliver to our customerâs sophisticated and growing requirements. We will do this whilst delivery strong contracted recurring revenue and margins.
âThe synergies between the two companies and the expertise of teams involved will create a truly advanced and exciting offering to our current and potential clients.â
The deal will secure an estimated US$19 million (A$30 million) in revenue for Bravura over the initial term, with an option to extend
Bravura Solutions now services over 180 clients from 15 offices in 10 countries around the world, and administering more than 18 million accounts and US$1.1 trillion in funds managed globally.