First Derivatives selling down stake in Quantile Technologies

First Derivatives has agreed to sell part of its investment in Quantile Technologies to growth equity company Spectrum Equity, it announced on Tuesday.

The AIM-traded firm said that under the transaction, it would dispose of the majority of its holding in Quantile for cash of £11m, representing a total gain of £10m on the initial cost of the investment, and a £7m gain on the current carrying value).

Following the transaction, First Derivatives confirmed it would retain a minority stake in Quantile.

“The investment occurred as part of FD's strategy of assisting companies that were adopting KX in new and innovative ways,” the board explained in its statement.

“Quantile utilises ‘KX’ as the technology that underpins its highly successful advanced compression and risk rebalancing services and remains a valuable customer of the group.”

First Derivatives said the investment in Quantile represented its largest investment of that type, accounting for £10m of a total of £16m of other financial assets on its consolidated balance sheet as at 28 February 2020.

In the year ended December 2019, Quantile reported net profit of £0.7m, although its performance was not consolidated as First Derivatives’ holding was below 20%.

“The consideration has been received and the proceeds will be used for general working capital purposes,” the directors added.

At 1114 GMT, shares in First Derivatives were down 2.73% at 2,850p.