In January last year, New York-based reference data management solution vendor Reference Data Factory (RDF) was demerged from Toronto-based consulting firm LakeFront Data Ventures, but following its acquisition by RDF’s new owner First Derivatives this week, the firms are now back together again. The firms originally demerged to avoid what former president and CEO of RDF (and now president of First Derivatives’ US operations) Dale Richards called “internal and external confusion”, but perhaps this will not be such a problem in the framework of First Derivatives’ overall data management portfolio?
Following its acquisition of RDF for US$10 million in October last year, First Derivatives has therefore now acquired LakeFront Data Ventures and its data community job portal LakeFront Data Jobs. The vendor is hoping that the acquisition will boost its data management capabilities in consulting, advisory and implementation services in the area of enterprise and reference data. By employing more experts on the ground, it hopes to fine tune its approach to the reference data management market, which is a new area for First Derivatives.
One can’t help but think the position of Richards as both former CEO and current board member of LakeFront Data Ventures and president of First Derivatives’ Americas operations may also have had something to do with the acquisition. Since the acquisition of RDF, the firms have been closely working together under his watchful eye as strategic partners; the acquisition is seemingly a “natural extension” of this tie up.
Richards is also no doubt confident that RDF and LakeFront Data Ventures will be much more compatible under the banner of a larger vendor. At the time of the demerger last year, Richards said: “LakeFrontData Consulting is a pure consulting firm and RDF is a pure data management integration tools vendor. The proposed merger caused confusion externally for our clients and we saw that strategically it didn’t make sense to combine the businesses.” This is obviously no longer the case in the eyes of Richards.
LakeFront Data Ventures has been around for four years, having been founded back in 2006 to focus on the reference data implementation space exclusively. Much like RDF, within the larger framework of First Derivatives, it will benefit from greater client reach and geographic footprint. Accordingly, although the team will continue to be based in Toronto, they will also be working at other sites across the First Derivatives group as required.
The total consideration is being satisfied by an unspecified cash payment and the issue of 82,602 new ordinary shares, which will, when issued, rank pari passu in all respects with the existing ordinary shares. Application will be made to the London Stock Exchange and the Irish Stock Exchange for the consideration shares to be admitted to trading on AIM and ESM. It is expected that the Consideration Shares will be admitted to trading on 6 August 2010. Following admission the enlarged issued share capital of the company will be 15,750,328 ordinary shares.
Given the past history of RDF and LakeFront Data, it will be interesting to see how it all fits together under the First Derivatives framework going forward.