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Emboldened by a simplification strategy that has seen it sell off multiple assets over the past two years, financial services software group Iress (ASX: IRE) has struck a deal to offload its Paris-headquartered low-latency market data business QuantHouse to an Austrian buyer.
Vienna-based BAHA Tech Holding AG will pay Iress €17.5 million (A$31.4 million) in cash before costs upon completion of the transaction, which depends on BAHA ensuring it has the necessary market data agreements in place to ensure a seamless continuity of service to QuantHouse clients.
Iress has also agreed to to a five-year supply agreement with BAHA to provide existing QuantHouse market data feeds into Iress’ software. The Melbourne-headquartered company expects the transaction will be completed by the end of the year.
Today's announcement follows the £85 million ($167 million) sale of Iress' UK Mortgages business to Bain Capital which was completed in August 2024 - the fourth and largest divestment executed under its transformation plan.
Iress also divested its Managed Funds Administration (MFA) business to SS&C Technologies for $52 million, its Platform business to Praemium (ASX: PPS) for $1 million plus $20 million worth of potential earn-outs, and its portfolio management software to SecuritEase Holdings UK Limited, a member of the New Zealand-based SecuritEase group.
A strategic review undertaken by Iress determined it was not the "natural owner" of QuantHouse, concluding the business would perform better under renewed ownership with the capacity and intent to invest in delivering specialist market data offerings at scale to global clients.
"With our transformation program now complete, Iress is focused on strengthening and growing our core business operations in Wealth and Trading & Market Data," says Iress Group CEO Marcus Price.
"While QuantHouse has been a valuable part of our business, we recognise its future potential will be best realised with an owner committed to investing in its global expansion.
"We are delighted that BAHA shares this vision and is the ideal owner to support QuantHouse in its next phase of growth. This transition represents an exciting opportunity for clients and employees, and we are committed to ensuring a seamless handover and continued collaboration in the future."
BAHA founder and president Christian Baha welcomes the QuantHouse team as "new part of the BAHA family", but clarifies it will continue to operate "under its strong brand as an independent unit".
"The BAHA offering now includes a comprehensive portfolio of high-end institutional information services including the BAHA terminal workstation, an independent proprietary global newswire, a leading consolidated global data feed and high-quality time series data sets critical for back testing and compliance requirements," Baha says.
"Combined with QuantHouse, which has built an excellent reputation as a pioneering provider of low latency real-time market data for over 21 years, we look forward to expanding together as an innovative company that will revolutionise the high-end institutional financial market."
Today's news comes less than two months after Iress revealed a sharp, positive turnaround in performance for the 2024 calendar year. In light of impairments in 2023, it went from $88.7 million in the red to a $137.5 million profit, even though revenue was down 3.4 per cent at $604.6 million.
Price described 2024 as an "outstanding" year for Iress with the "successful execution of our transformation program delivering significantly improved business performance across all metrics".
"We delivered earnings that exceeded our guidance range, through a strong focus on capital allocation, operating leverage and financial discipline, while enhancing margins across all business units and driving improved customer sentiment," he said at the time.
"Although our formal transformation program is now complete, we remain committed to delivering further operating leverage while we develop new growth vectors in our core markets.
"Iress is now a simpler, leaner organisation with a more efficient cost base and stronger balance sheet that provides both capacity and flexibility.
"Having made the clear strategic choice to focus on our strong key businesses, we are well positioned to capture the significant opportunities present in global wealth management, powered by data & AI, while continuing to provide critical trading and market data infrastructure to the industry."
Iress shares are down 2.15 per cent at $7.72 this afternoon.
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