The head of FD Technologies plc says the company’s KX software division is on a “realistic path” to becoming a billion pound business before this decade is out.
And he believes a review to break the Newry-founded business into three separate entities is “the right strategic move”
Seamus Keating, chief executive of the listed firm, was speaking to the Irish News in the wake of an announcement to the Stock Market last week of a major structural review which will see the business eventually broken into standalone operations.
Originally founded as First Derivatives in 1996 by the late Brian Conlon, the business underwent a major rebrand in mid-2021 which saw a three-way split internally, creating individual software, consulting and data analytical divisions, each with their own HR, finance, sales and operations functions.
“What we’re now doing is the next logical step in what will be in the best interest of all shareholders,” Mr Keating said.
“As each of the businesses have become bigger and more successful, we knew we had to think about who are the best owners and shareholders for each of those types of businesses.
“People who want to invest in a software business, for example, mightn’t necessarily want to invest in a consulting services business.
“We always believed we’d get to the point where it made sense to have standalone and different investment propositions.”
The smallest part of the overall operation is MRP, which uses data analytics to help clients find high-value leads,
It has already been merged with CONTENTgine, a US-based provider of B2B technology buyer insights and lead generation. FD Technologies will be a minority shareholder at 49%.
But the real focus will now be on the KX software division and First Derivative consulting business, which have both enjoyed organic growth of 20% compound over the last two years.
Mr Keating added: “What we did last week was to set out the direction of travel from here for those two businesses.
“There’s no time frame set out, and we see it as a huge opportunity for the businesses and everybody associated with them to have a strong independent futures with lots of opportunity. We’re excited about this.”
Management structures are already embedded in both. David Collins was appointed CEO of First Derivative in 2020. and has global responsibility for all aspects of the consulting and managed services business, while the software business is run by Ashok Reddy, who is based in New York, where the biggest concentration of customers are.
Mr Keating said: “KX - which is a company-born invention created by our teams in Newry, Dublin, Belfast, London and Toronto - has absolutely cemented its position as the best technology on the planet in terms of the volume, variety and velocity of data.
“We’ve formed partnerships with all of the big cloud vendors like Microsoft, Snowflakes, Databricks, and obviously Google.
“They want to partner with us and actually become our customers because of the capability of our technology, and we’re hugely proud of that and the steps we’ve taken over the last two years.”
He added: “If we stay on the trajectory we’re on, KX - which we’re also now taking into areas like healthcare - has the potential to be a massive business on the global stage, up there with the biggest in the world.
“We believe we can take it from roughly £100 million today to a £1 billion business. That’s a very realistic path.
“So what we’re doing is the next phase of giving the three businesses a very clear, independent, well-funded and focused path.
“There’s no time scale. We’re not sitting here with the intention that it’s just months away, but equally it’s not years away either.”
Mr Keating insists the company’s Newry roots will be cemented.
“We’ve 2,600 people at 15 locations across the world, with 1,000 on the island of Ireland, of whom 350 are officed in Newry.
“We remain among the north’s biggest graduate recruiters, taking on more than 200 every year. Another 17 will start with us next week, all based here Newry. And some of our best KX people of today started as graduates in Newry 10, 12, 15 years ago.”
He added: “We believe the KX and consulting businesses will now have the potential to grow much faster. It will need the capital and the absolute laser focus of everybody involved, from the board through to the management team and the employees.”
