Support service provider SimplyBiz has begun to deploy some of the funds raised from its stock market float with a deal to buy ratings and technology business Defaqto.
SimplyBiz will pay £74.3m to acquire the entire issued share capital of Regulus Topco Limited, Defaqto’s parent.
On completion, Defaqto will have £3.4m in cash on its balance sheet, which will also be included in the acquisition.
SimplyBiz’s announcement to the stock market this morning says that it will “offer Defaqto access to its knowledge and experience of the advisory and asset management markets”, while Defaqto will help SimplyBiz as it eyes expansion into general insurance and banking.
The deal is being funded through a combination of new share placings by SimplyBiz, £37.5m of borrowings from new bank facilities, and £3m from its cash reserves, with the deal only to go ahead if the share placing is successful.
A statement from Defaqto says the firm will remain operationally independent after the sale.
Defaqto chief executive Zahid Bilgrami says: “While it will enable us to continue operating in an independent and autonomous manner, it will also carry many advantages of being a part of a listed entity. It will enable us to develop new technology faster, and thus continue to develop market-leading products for our clients at a time of vast technological change in the financial services sector.”