StatPro is buying the UBS Delta Unit for $13.8 million to leapfrog into the front office.
StatPro, a cloud-based portfolio analysis and asset-pricing services vendor, will be moving into the front office with the acquisition of the UBS Delta unit, which measures risk and performance across fixed income, commodities, equities and foreign exchange instruments.
The acquisition price of €13 million [$13.8 million] is to be paid in cash over three years, including an upfront payment of €8.7 million [$9.2 million], according to a StatPro financial statement. StatPro, which is listed on AIM, the London Stock Exchange’s market for smaller companies, serves the global asset management industry.
The acquisition of UBS Delta will be phased in over three-to-five years, and will enable the firm to expand its risk and performance analytics offerings from the middle office to the front office of asset managers. UBS Delta’s functionality will be incorporated into its flagship product, StatPro Revolution.
“StatPro wants its Revolution platform to be the most complete multi-asset performance and risk analytics solution in the market,” according to a StatPro spokesperson in response to FTF News.
“We understand that the front and middle offices are working closer and closer together, and being able to consolidate systems is a key area for cost savings as legacy systems are replaced with new cloud-based platforms,” the spokesperson says. “Being able to collaborate between front and middle office teams, using the same signed-off data and access to both performance and risk analytics within the same system, can lead to productivity gains for asset managers of all sizes.”
Over the next three years, customers will see changes in the StatPro product line.
“StatPro will begin work on adding all the existing UBS Delta functionality into StatPro Revolution,” the spokesperson says. “This is a process we expect to take up to three years and we will fully support the existing UBS platform for the next five years. We have no plans to rush clients off the existing system and will help manage migrations to Revolution once it’s ready.”
Will there be special promotions/offers for current customers of StatPro and UBS Delta?
“We will work with all our existing and new clients to help manage the transition from UBS Delta to Revolution,” the StatPro spokesperson says. “While we don’t have plans to run specific promotions or discount campaigns, we will listen to our clients and their requirements as the migration process begins once functional parity has been achieved in Revolution. UBS Delta has over 100 existing clients and our goal is to ensure they are all catered for and supported during what is planned to be a seamless upgrade process.”
For StatPro, the purchase will be significant because it is expected to contribute revenues of £14.5million ($18.1 million), culminating in combined sales of £53 million ($66.4 million). Adjusted EBITDA from the acquisition is forecast to be in the order of £2 million ($2.5 million) to the £2.5 million ($3.1 million), officials say.
Throughout the transition, and until StatPro has fully integrated Delta’s functions, UBS will continue to operate and support the platform for its clients, officials say. In addition, under the terms of the agreement, StatPro will take on Delta’s 54 employees and contractors.
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