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Simplybiz Group buys Defaqto for £74.3m

  • 20/03/2019
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Simplybiz Group buys Defaqto for £74.3m
Compliance and business services provider Simplybiz has bought ratings and technology firm Defaqto through the issued share capital of Regulus, ahead of a share placement to raise £29.1m.


Defaqto is a financial services technology business operating a fintech platform for 8,500 advisers and providing independent ratings of 21,000 financial products and funds, licensed by 230 brands.

Simplybiz offers services in the mortgage and wealth markets, where Defaqto will help the group to advance its services into the general insurance and banking markets as it expands.

The acquisition is expected to be earnings enhancing within the first twelve months of collective operation. Regulus is currently owned by Synova Capital (67.5%) and Defaqto management (32.5%).

The enlarged group following the acquisition creates a single fintech and support services group, which will benefit from an increased number and range of distribution channels, it said.


‘Considerable opportunities’

“Defaqto’s dominance in these two sectors will provide the group with considerable opportunities as it looks to grow its customer base and use technology to expand its footprint within retail financial services. Similarly, SimplyBiz will offer Defaqto access to its knowledge and experience of the advisory and asset management markets,” said the statement.

SimplyBiz has completed seven acquisitions since founding the business in 2002, including Landmark Surveyors in January 2018.

All key Defaqto management will be retained under the terms of the acquisition, incentivised by a bonus and cash long-term incentive plan (LTIP) on outperformance. Defaqto management will have in aggregate a 4.3 per cent interest in the SimplyBiz Group.

Neil Stevens and Matt Timmins, joint CEOs of The SimplyBiz Group, said: “Having long respected the Defaqto management team, we also recognise not just the strong strategic fit of the business, but also its cultural alignment.

“Defaqto is a business built upon industry leading talent and we look forward to working with our new colleagues as we continue to enhance services to financial intermediaries and product providers and deliver value for shareholders.”

On the mortgage side of the business, Timmins, added: “SimplyBiz and Defaqto aim to continue to build on their respective strengths and very much see the mortgage market as a future opportunity for growth. The market is currently underserved by quality technology vendors and the combination of SimplyBiz’s compliance and business services, coupled with Defaqto’s technology, will create opportunities to further serve this exciting market.”

Zahid Bilgrami, CEO of Defaqto said: “We are absolutely delighted with SimplyBiz’s decision to acquire Defaqto. It opens an exciting new chapter in our development as a leading financial information business, and we look forward to the many opportunities that being part of a larger group will present.”


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