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Brady, the trading, risk management and settlement solutions provider to the energy, metals and soft commodities sector, who is becoming quite a consolidator in its space, has announced two more purchases: Norwegian Navita Systems and Swiss Syseca.
The duo will add further strength to its growing energy division, which had already been boosted by the 2010 Viz Risk Management Services acquisition (see Brady goes Norwegian with Viz). Brady is placing additional shares to raise c£18m.
At c£1.2m the proposed Syseca purchase is relatively small and will be financed through a combination of cash and shares. Annual revenue was c£1.9m with pre tax profits in the sub £1m space – given the purchase price it looks like Brady is coming to the rescue and anticipating bagging a bargain. Brady knows what it is getting with the provider of logistics software for electricity markets because it is an existing partner. Those gains include physical energy trading capability, which will complement Brady’s trading and risk business areas, and the Navita acquisition. It is expected to be revenue enhancing during 2012 but we expect that will mainly come through cross sell opportunities.
The proposed Navita Systems acquisition is a much bigger proposition. Brady is offering a cash and share deal worth £17.1m to purchase the company, with most of the price being paid in cash. The privately held company (who provides systems to the energy markets with a particular focus on physical power and carbon emissions trading), has not revealed its revenues. However, the agreed purchase price exceeds Brady’s annual revenues for 2010, which were £11.1m (to December 31 2010), and £8.8m for the six months to June 30 2011 (see Brady energized by Viz).
UK-based Brady is taking on a big task with these two proposed acquisitions, particularly with Navita, but it also has big growth ambitions. It believes that with these purchases it will be the largest native European commodities software provider and the fifth largest energy and trading and risk management player globally. Given our UK bias, we hope Brady's growth plans work out.
