United Utilities Plc will pay up to 38.5m pounds ($67m) to buy 1st Software Group Ltd, which develops back-office software for independent financial advisers, IFAs.
The target company will be merged with the financial services arm of United Utilities’ Vertex operation, which provides IT and business process outsourcing.
United Utilities, which is one of the UK’s largest water utility companies, will pay an initial 25m pounds ($43.5m) for Gallows Hill, UK-based 1st Software, plus a two-year, performance-related earn-out of 13.5m pounds ($23.5m).
Vertex already operates an Internet portal for IFAs called Exweb, which provides online comparative quotations and new business applications to over 21,500 subscribers. Vertex said this will fit well with 1st Software’s Adviser Office product, a back-office administration system designed to help IFAs handle their client management, sales, marketing, and business records.
1st Software made an operating profit of 2.6m pounds ($4.5m) on revenue of 10m pounds ($17.4m) in 2005.