'We are pleased to have reached an agreement': Newry software firm facing potential takeover by US private equity giant in a deal worth over £540m

Northern Ireland software analytics firm FD Technologies is facing a potential takeover by American investment firm TA Associates in a deal worth over £540m.

The offer comes from Kairos Bidco, a new Boston-based private equity company set up by TA Associates to carry out the deal. If approved, the Newry-based firm, will receive £24.50 in cash for each of their shares — a price that represents a strong return on their investment.

Since the announcement shares in FD Technologies have surged by more than 20% in response to the takeover approach.

FD Technologies is best known for its KX software, which helps big companies, like major banks and manufacturers, make sense of large amounts of data and use it to make faster decisions.

The company, which has offices in Belfast, Dublin and London, operates in 12 countries across Europe, North America, and Asia-Pacific, and employs more than 580 people worldwide.

Over the past year, FD has reshaped its business to focus entirely on software. In 2023, it sold its consulting division First Derivative to US tech firm EPAM Systems for £230million. That sale allowed FD to return £120 million to shareholders and concentrate fully on growing its software platform, KX.

FD Technologies’ board of directors has recommended the deal to shareholders, saying it fairly reflects the company’s value and future potential. Chair Donna Troy said: "We are pleased to have reached an agreement with TA which gives shareholders the opportunity to realise value in cash at an attractive premium.

"The company has been successfully repositioned as a pure-play database software business and returned £120m of capital to shareholders following the sale of our First Derivative consulting business.

"KX is now strategically positioned to execute the next phase of development for the business. The board is unanimous in its belief that this transaction recognises the quality and underlying value of the business and delivers appropriate value to shareholders."

Seamus Keating, chief executive of FD Technologies, explained: "I believe TA is a valuable partner for the company with a shared commitment to enhancing KX's business and capitalising on the longer-term opportunity in the data and analytics software market.

"TA has significant experience in supporting high-growth global software businesses and we believe it is a suitable and appropriate partner for our employees, customers and other stakeholders."

Ashok Reddy, chief executive of KX, continued: "KX's high performance data and analytics software supports fast-moving, data-intensive organizations and is foundational to the AI and analytics stacks of global enterprises. TA's strategic and operational expertise will support our mission to accelerate product innovation and deepen our impact across high-growth, high-value verticals."

Hythem El-Nazer, co-managing partner of TA, added: "With decades of experience investing in and scaling leading enterprise software companies, TA has developed a deep understanding of what it takes to build enduring platforms.

"That perspective gives us a strong appreciation for the unique position KX holds in today's fast-moving, data and AI-driven environment. We believe the company is well positioned to meet the growing demand for real-time insights and help global organizations operate at the speed of data. We're excited to partner with Ashok and the KX team to accelerate their vision."

Latham and Watkins LLP is acting as legal adviser to TA and Bidco in connection with the acquisition. Arthur Cox is providing advice to TA and Bidco on Northern Ireland and Republic of Ireland legal matters.

Allen Overy Shearman Sterling LLP is acting as legal adviser to FD Technologies in connection with the acquisition.

Yesterday shares in FD soared after the firm's board said they were minded to recommend a proposal from TA.