SimplyBiz Group has agreed a deal to acquire the owner of ratings and technology business Defaqto.
The support service provider based in Huddersfield is using funds raised from its flotation on the stock market to buy Regulus Topco, owner of the Buckingham-based FinTech.
SimplyBiz will pay £74.3 million to acquire the entire issued share capital of Regulus Topco.
Defaqto continually assesses more than 43,000 financial products in the UK and will continue to operate as an independent business within the group while the management team, led by CEO Zahid Bilgrami, will also remain in place.
On completion, Defaqto will have £3.4m in cash on its balance sheet, which will also be included in the acquisition.
SimplyBiz Group is the UK’s largest independent provider of compliance and business services to financial advisers and financial institutions.
The company generated revenues of £12.8m in 2018, an increase of 10 per cent on 2017, with EBITDA of £5.3m, up seven per cent.
Neil Stevens and Matt Timmins, joint chief executives of the SimplyBiz Group, said: “We are delighted to announce the successful acquisition of Defaqto, which will play an important role in building on the group’s strong momentum and enabling us to unlock a wide range of additional growth opportunities.
“The combination of the largest provider of outsourced regulatory and business support to the retail financial services market, with one of the leading providers of financial information and technology, will create a market leading platform across Retail Financial Services.
“Collectively the two businesses will work to enhance our proposition to the Banking and General Insurance sectors whilst continuing to invest in the leading FinTech platform.”
Zahid Bilgrami, chief executive of Defaqto, added: “We are absolutely delighted with SimplyBiz’s decision to acquire Defaqto.
“It opens an exciting new chapter in our development as a leading financial information business, and we look forward to the many opportunities that being part of a larger group will present.
“While it will enable us to continue operating in an independent and autonomous manner, it will also carry many advantages of being a part of a listed entity. It will enable us to develop new technology faster, and thus continue to develop market-leading products for our clients at a time of vast technological change in the financial services sector.”
The conditional institutional placing was conducted jointly by Zeus Capital and Peel Hunt.