First Derivatives has acquired New Jersey-based data management outfit the Reference Data Factory for an initial consideration of $2.5 million, with an additional $7.5 million reserved for earn-out provision.
Founded in 2004, with offices in New York & Toronto, RDF's principals established the firm after successfully developing the GoldenSource product.
RDF's software manages and distributes security master and securities reference data for financial institutions and is currently in use in several Wall Street banks and other related entities such as Fitch Ratings.
First Derivatives says the RDF product suite will be incorporated into its Delta algorithmic trading software platform.
The initial consideration will be satisfied by a cash payment of $2.0m and an additional $0.5m in First Derivative shares. The remaining earn-out will be paid in cash over a three-year period according to sales.
In addition, each of RDF's four directors will receive performance-based share options up to a maximum of 400,000 shares in First Derivatives' stock.
As part of the acquisition, Dale Richards, CEO of LakeFront Data Ventures and Board Member of RDF joins the advisory board of First Derivatives.
The acquisition of RDF completes a busy month for First Derivatives, which recently acquired a further 15% interest in Californian analytical database vendor Kx Systems for $7.5 million.