Newry-based FD Technologies has undertaken a major structural review which will see it broken into three separate divisions which it says is “in the best interest of all shareholders”.
The company, founded in 1996 by the late Brian Conlon, will start the change process by merging its MRP business with CONTENTgine, a US-based provider of B2B technology buyer insights and lead generation.
The board says it will then take a measured approach to the separation of KX and First Derivative, particularly with respect to the timing of any transaction, having regard to market conditions to ensure that a divestment of First Derivative reflects its value.
For the financial year ending to February 2023, MRP generated revenue of £41.5 million and a profit of £1.4m while in the six months to last August is had sales of £15.7m and made a small loss.
In the second half of the financial year MRP continued to incur a loss.
The combined entity is expected to be profitable from the first quarter and generate a cash run-rate of £5m by the end of calendar 2024.
While it is not expected to be utilised, the group has made available a $5m debt facility for the next 12 months to the combined business.
FD Technologies will own 49% of the combined entity, which will be reflected as an associate investment rather than consolidated in Group financial statements. The net asset value of MRP at the date of the transaction was approximately £19m.
Company chair Donna Troy said: “FD Technologies has an exciting collection of assets and at this stage in the evolution of these businesses and against the current market valuation, it is the right decision to take transformative action to separate them and realise value for shareholders.
“I’m confident we can address some of the recent short term trading issues with the actions we have announced today in the trading statement and with focus and input from our management and Board we will ensure we maximise the potential across the portfolio.”
Seamus Keating, chief executive of FD Technologies, added: “The conclusion of the structure review provides a clear path to create value for shareholders.
“As a first step, we are pleased to announce the merger of MRP with CONTENTgine to create a leader in the demand generation services market.
“This transaction creates a strong, attractive business as the sector consolidates. We will now focus on the separation of KX and First Derivative and will update shareholders as the process progresses.”
The company - which is one of the north’s biggest graduate recruiters - currently employs around 2,800 people worldwide.
