FD Technologies plc (LON:FDP) announces an update to its structure review, which considered the optimal organisational structure and allocation of capital to best deliver value for shareholders.
The Board has unanimously concluded that the separation of its three businesses is in the best interest of all shareholders.
As a first step towards this goal the Group announces that it has agreed to an all-share merger of its MRP business with CONTENTgine, a provider of B2B technology buyer insights and lead generation.
The Board will take a measured approach to the separation of KX and First Derivative, particularly with respect to the timing of any transaction, having regard to market conditions to ensure that a divestment of First Derivative reflects its value.
For the financial year ending 28 February 2023, MRP generated revenue of £41.5m and adjusted EBITDA of £1.4m while in the six months ending 31 August 2023 it generated revenue of £15.7m and an adjusted EBITDA loss of £0.2m. In the second half of the financial year MRP continued to incur a loss. The combined entity is expected to be profitable from the first quarter and generate a cash EBITDA run-rate of £5m by the end of calendar 2024.
While it is not expected to be utilised, the Group has made available a $5m debt facility for the next 12 months to the combined business.
FD Technologies will own 49% of the combined entity, which will be reflected as an associate investment rather than consolidated in Group financial statements. The net asset value of MRP at the date of the transaction was approximately £19m.
Donna Troy, Chair of FD Technologies, said:
“FD Technologies has an exciting collection of assets and at this stage in the evolution of these businesses and against the current market valuation, it is the right decision to take transformative action to separate them and realise value for shareholders. I am confident we can address some of the recent short term trading issues with the actions we have announced today in the trading statement and with focus and input from our management and Board we will ensure we maximise the potential across the portfolio.”
Seamus Keating, CEO of FD Technologies, said:
“The conclusion of the structure review provides a clear path to create value for shareholders. As a first step, we are pleased to announce the merger of MRP with CONTENTgine to create a leader in the demand generation services market. This transaction creates a strong, attractive business as the sector consolidates. We will now focus on the separation of KX and First Derivative and will update shareholders as the process progresses.”
