The Iress Ltd (ASX: IRE) share price shed 1.5% to $13.68 this afternoon despite the financial software group announcing the up to €38.9 million acquisition of market data and trading infrastructure provider QuantHouse.
"QuantHouse is highly complementary and strategically aligned to IRESS' existing and future activities and to its international offering, including IRESS' increasing focus on data. The acquisition will further strengthen IRESS' international market data business and provide opportunities to achieve cost synergies and scale," IRESS CEO Andrew Walsh said.
The €38.9 million final price is partly subject to earn out performance consideration through to 2021 and represents 2x reported 2018 revenue of €21.2 million. QuantHouse is currently loss-making which means the acquisition carries a little more risk for Iress's management team. It will be debt funded but Iress reports it does not consider a leverage ratio of 1.5x "segment profit" a problem after the transaction.
Elsewhere today another data and digital financial services business operating in Europe in Link Administration Holdings (ASX: LNK) flagged a Brexit-hit UK market as contributing to a big profit downgrade. Link's share price is down 22% to $6.01.
