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Bravura (ASX:BVS) to buy UK Delta for $41.5 million

Bravura Solutions Ltd (ASX: BVS) has announced that it’s going buy UK-based Delta Financial Systems for $41.5 million.

What is Delta Financial Systems?

Delta is a UK software company that provides technology to power pension administration in the UK market. Bravura said that its products are highly regarded in supporting the administration of self-invested personal pensions (SIPPs) and small self-administered schemes (SSASs).

Delta’s technology systems currently supports more than 30 UK clients.

The UK company made £6 million of revenue in FY20 and it’s forecast to achieve revenue growth of 20% to 30% with margins similar to Bravura’s wealth management segment.

Why is Bravura buying Delta?

The acquisition price is £23 million, or $41.5 million in Australian dollar terms.

Management said that it will broaden Bravura’s product suite and is a natural extension of its core Sonata offering. It also offers the chance for Bravura to offer other products to Delta’s client base.

Bravura CEO Tony Klim said: “We are delighted that Delta is joining Bravura. Both businesses have complementary products that together, provide a compelling offering to support the mission-critical operations of wealth management firms in the UK.”

Summary

This seems like a smart bolt-on acquisition for Bravura. It’s good to expand internationally and diversify earnings, particularly with the Australian dollar at a strong point. The high margins also sound good.

Bravura is a promising business and it’s priced at a low level compared to the past couple of years. I think it could be an opportunistic buy. Other technology ASX growth shares could also be worth buying such as Pushpay Holdings Ltd (ASX: PPH).

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