Advised Fidessa group on its acquisition of LatentZero, a supplier of front-office software to investment managers
Apr 2007
acquired
$124 million
  • Sector: Fintech, WealthTech & InsurTech
  • Deal Type: Strategic Deals; Public Deals
  • Engagement type: Buyside
  • Size: $124 million
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Arma Partners is pleased to announce it acted as exclusive financial adviser to royalblue group plc (LSE: RYB), the company behind Fidessa, a world-leading solution for multi-asset trading systems, market data and global connectivity, in its acquisition, announced today, of LatentZero Limited (“LatentZero”), the privately-owned, leading supplier of front-office software to investment managers. Initial consideration is £38 million and total consideration is up to £63 million ($124 million).

royalblue’s Fidessa product suite is used by over 85% of global, tier-one equity brokers. With asset managers (the “buy-side”) increasingly requiring broker (“sell-side”) -style trading tools integrated into their investment and order management processes and the sell-side striving to deliver enhanced execution solutions to their customers, the acquisition provides, for the first time, the potential for true integration of multi-asset buy-side and sell-side trading flows on a significant scale.

royalblue and LatentZero also believe that the growing sophistication of trading and the increasing regulatory burdens will continue to fuel demand for automation of business flows and that the need for rapid communication and information flow between the two sides will become increasingly important over the coming years.

– Formed in 1999, LatentZero supplies front-office software to the asset management industry, counting 9 of the world’s largest asset management firms amongst its 75 clients

– LatentZero’s Capstone product is used by c. 4,000 portfolio managers, traders and compliance officers who rely on Capstone to manage assets in excess of $8 trillion

– With offices in London, Boston, New York and Paris, LatentZero employs around 170 staff

– Founded in 1981, royalblue group plc (LSE: RYB), provider of Fidessa, posted revenues of £94.6m in 2006 and employs c. 850 people

– Fidessa provides trading functionality, market coverage, order management and execution capabilities to buy- and sell-side communities

– Headquartered in London with offices in New York, Tokyo, Hong Kong, Paris and Toronto, Fidessa serves over 10,000 users, and is used by over 85% of global, tier-one equity brokers around the world

– The acquisition provides integration of multi-asset buy-side and sell-side trading flows on a significant scale

– With the buy-side increasingly requiring sell-side style trading tools integrated into their investment and order management processes and the sell-side striving to deliver enhanced execution solutions, both
Fidessa and LatentZero will be able to leverage the other’s services within their own customer base

– This transaction will enable LatentZero to accelerate its strategy of delivering connectivity services, market data and analytics to its customers as well as expanding its geographic reach, scale and support services

– Arma Partners was engaged by the Board of Fidessa to help negotiate a transaction and coordinate the due diligence process

– A detailed term sheet was negotiated upfront which facilitated discussions later in the process

– Due diligence involved both internal and external parties and needed to be carefully coordinated