MergerMarkets: Adaptive Financial Consulting has cash for deals, US transaction possible

Source: MergerMarket

Author: Lloyd Vassell

Adaptive Financial Consulting, a UK-based, real-time trading technology provider, has the financial firepower to make acquisitions and could seek to bolster its commodities and sell-side trading activities, co-founder and Director Matt Barrett said.

Adaptive’s management, which forecasts GBP 21m FY18 turnover, is alert to potential targets while it implements the company’s organic growth strategy to further penetrating the US market following its August 2017 entry by opening a New York office. Barrett did not discount potentially buying a US company that provides entry into local financial centers such as Boston and Chicago, noting the strong traction the company has already gained in New York.

A target’s operations and intellectual property, and post-deal synergies, rather than its size, will be the determining factors when assessing transactions, Barrett said. However, Adaptive has the firepower to finance a significant deal as it is highly cash generative, he noted without elaborating.

The company will mandate a top-tier financial adviser for the deal due to diligence work, Barrett said and is also in the process of expanding its board with individuals with M&A experience. Barrett predicted the new board will be in place within the next two months.

Adaptive reported turnover of GBP 15.2m for the year ending June 2017, with GBP 4.1m profit. It has recorded annual profit growth of 59.52% over the last three years, company information shows.

Various private equity and venture capital firms have approached Adaptive due to its strong year-on-year earnings growth, but it has no plans to enter financial institution agreements at this juncture, Barrett said; management is focused on building the business. Founded in 2012, Adaptive is equally owned by its directors: Barrett, John Marks, Olivier Deheurles and Loic Roze.

London-headquartered Adaptive has offices in New York, Montreal, and Barcelona. It designs, builds and operates real-time trading platforms used in the financial, capital and commodities markets, company information shows, and its unique intellectual property gives it the potential to enter new, unspecified market segments, Barrett said.

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