East Kilbride’s Ideagen in £16m swoop

Ideagen, the global software company with a major presence in East Kilbride, has swooped on an English firm in a deal worth almost £16 million as it targets growth in a growing market.

Ben Dorks, CEO of Ideagen, which has a major presence in East Kilbride. Picture: contributed.

The group has acquired Redland Business Solutions, a software-as-a-service (SaaS) company that supplies regulatory and compliance tools to the financial services industry, including several FTSE 100 clients.

Aim-quoted Ideagen snapped up the firm that is based near Birmingham in a £15.8m cash deal, with a further £500,000 payable in 12 months based on the achievement of recurring revenue targets. Redland currently generates annual revenues of around £4.2m, of which roughly £3m is recurring.

Ideagen said the acquisition will give it “first mover advantage” in an emerging branch of compliance and brings more than 40 clients to the group, including Nomura, Santander, Investec, Hargreaves Lansdown and Rathbones.

Redland’s “Insight” platform provides banks, investment managers, asset managers and insurance companies with services that underpin the senior managers and certification regime (SM&CR) – a programme designed by the Financial Conduct Authority (FCA) following the 2008 financial crash to ensure the right people in regulated firms are held accountable for their decisions.

The new initiative took effect for banks, building societies, credit unions and dual-regulated investment businesses in March 2016 and will be rolled out to all other FCA-regulated firms on 9 December, replacing the approved persons regime.

Ideagen chief executive Ben Dorks said: “Redland is a high-growth, successful and profitable software company which will significantly strengthen our audit and risk business unit.

“This acquisition enhances Ideagen’s financial services domain knowledge and provides us with ‘first mover’ advantage in relation to SM&CR compliance and in the general regulatory evolution of the financial services industry.”

Executive chairman David Hornsby added: “Redland is an extremely valuable addition to the group and is in line with our strategy of acquiring integrated risk management businesses that have strong intellectual property and growing recurring revenues.”

Under the deal, Redland executive chairman Joel Turland and chief executive Gary Muchmore step down from their positions.

Turland said: “With thousands of clients globally, Ideagen will be able to introduce our Insight product to a range of new clients. I am looking forward to seeing ‘Insight’ and the wider Redland team going from strength to strength with the expanded reach and opportunities available via Ideagen.”

Ideagen last month announced that it is creating a dozen jobs at its base in East Kilbride’s Scottish Enterprise Technology Park as part of a global expansion.

The site is to be turned into a Centre of Excellence for first-line customer support, marketing, legal, products and service delivery as the group aims to become a leader in the governance, risk and compliance software market.