The Bravura Solutions Ltd (ASX: BVS) share price is trading more than 7% higher today. Over the past month, shares of Bravura Solutions Ltd are down -2%. For comparison, the S&P/ASX 200 (INDEXASX: XJO) has risen 1% in the same time.
About Bravura Solutions
Bravura is a wealth management software business supplying software and professional services to superannuation, pension, life insurance, investment, private wealth, funds administration and financial messaging. Bravura has more than 1,000 employees across 12 offices in Australia, New Zealand, the UK, Europe, Africa and Asia.
What’s Happened?
Bravura announced the acquisition of FinoComp this morning for a total consideration of $25 million.
FinoComp is an Australian software company that builds flexible software to support the UK wealth market. The software is used for tasks such as data analytics, client reporting, performance reporting and regulatory compliance.
FinoComp has been experiencing strong growth, with revenue up 27% in FY19 and expected to continue at this rate for the next three years.
Bravura says the acquisition will deepen the company’s technical capabilities and allow the company to provide plug-and-play solutions to a broader addressable market.
Bravura CEO Tony Klim said: “The combination of Bravura and FinoComp unlocks a strategically compelling opportunity for Bravura’s market-leading technology to drive more of our clients’ mission-critical operations. Combined with FinoComp’s cutting-edge technology, the acquisition extends Bravura’s wealth management offering.”
The transaction is expected to be completed by the end of October 2019 and is being funded from existing cash reserves.
Buy, Hold or Sell?
Bravura is very experienced when it comes to acquisitions, with this being the tenth acquisition the company has made. On the surface, this acquisition seems to make sense. However, with so many acquisitions it can be difficult to determine whether the company has strong organic growth or is only growing through acquisitions.
I’d have to look more deeply into FinoComp before commenting on whether this is a good move, but investors have received the acquisition well this morning.
For two other high-growth companies, check out the free report below.
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Disclosure: At the time of publishing, Max does not have a financial interest in any of the companies mentioned.
