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First Derivatives Completes Purchase of Cognotec

Financial software firm First Derivatives has bought FX technology company Cognotec Holdings out of receivership for $4.7 million.

The deal marks the final chapter in the 20-year history of Cognotec, which was set up by controversial businessman Brian Maccaba and hailed as one of the FX industry’s great technology hopes during the 1990s and turn of the century.

First Derivatives completed the purchase of Cognotec on 15 February after talks with the company’s receiver, Kieran Wallace of KPMG. The acquisition means First Derivatives will acquire the entire intellectual property rights of RealStream, the FX product suite for managing margins, rates and liquidity, and AutoDeal+, an FX pricing and execution engine.

The majority of Cognotec’s 60 employees based in operations in Dublin, London, New York, Singapore and Tokyo are expected to be retained by First Derivatives, except for some working in central functions.

Cognotec was placed into receivership on 22 January by Barclays Bank, which was owed around 6 million.

Cognotec Holdings was once valued at more than 130 million but went into serious decline after 2007 when it lost its biggest customer.

First Derivatives chief executive, Brian Conlon says the business is a good fit.

“Cognotec’s business, its people and its product portfolio are highly regarded in the FX world. In the last week I have been meeting with many of Cognotec’s global clients who have assured me of their continued commitment to RealStream and AutoDeal+. I have also made a commitment that we will extend Cognotec’s product and service capabilities significantly through a combination of increased investment in R&D, and cross pollination of the intellectual property and expertise in capital markets of both organisations,” Conlon says.

“First Derivatives has a strong track record of acquiring niche capital markets technology companies and significantly expanding their operations through investment and leverage of synergies with its existing business.”

Founded in 1996, First Derivatives employs over 400 people globally and has developed its own range of software – Delta – which is in use in top tier investment banks and hedge funds. The Cognotec deal is the latest in a series of transactions totalling $50 million, which has seen First Derivatives acquire the Australian risk management software company Hologram and the New Jersey-based Reference Data Factory, as well as increasing its stake in the Palo Alo-based database company Kx Systems.

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