Acquisition of Obsidian Solutions Limited

11 November 2019

Alpha Financial Markets Consulting plc

('Alpha FMC', 'Alpha', the 'Company' or 'Group')

Alpha FMC acquires leading cloud SaaS business

Obsidian Solutions Limited

Alpha FMC (AIM: AFM), a leading global provider of specialist consultancy services to the Asset and Wealth Management industry is pleased to announce that it has completed the acquisition of 100% of the issued share capital of Obsidian Solutions Limited, a financial services cloud-based SaaS business in the United Kingdom.

·; Alpha acquires Obsidian Solutions Limited ('Obsidian'), a leading financial service, cloud-based SaaS business

·; Obsidian brings a highly complementary suite of financial service software products including advanced business intelligence, client portals, reporting, and automated subscription/KYC management

·; This strategic acquisition further strengthens the Alpha Data Solutions ('ADS') business and has a proven industry track record

·; £5.7 million cash payable in two instalments, the first instalment being payable on completion and the second after six months, plus a four-year, performance driven earnout mechanism designed to maximise long-term recurring earnings

Background on Obsidian

Obsidian provides specialised software products to the investment management industry. It was founded in 2015 with the aim of unlocking the potential of operational data in financial services by leveraging the latest in cloud computing and modular software design principals. Its established product suites include advanced business intelligence for sales and investment data, client portals, fund and client reporting, and an automated subscription/KYC management module. Obsidian's cloud framework that ties the suites together was recognised as the Best Cloud Solution, and Most Disruptive Technology Solution in 2019.

Obsidian has offices in the UK and in Serbia and its team of 14 primarily consists of computer scientists with specialised industry knowledge and product delivery expertise. Obsidian has approximately 30 clients across its product suite.

Acquisition rationale

The addition of Obsidian generates further recurring revenue and provides complementary, technology-focussed products to the ADS proposition. The acquisition will expand the ADS 360 SalesVista product with additional reporting capability, adds a highly skilled technology development team with proven financial sector experience and expands Alpha's North American client base.

Transaction terms

The Group has acquired Obsidian for £5.7 million cash in base consideration, payable in two instalments over six months following acquisition, plus a contingent earnout designed to maximise long-term recurring earnings, which may become payable, in cash or equity, at milestones over the four years following completion. Obsidian should be earnings enhancing to the Group in FY 21, the first full financial year of ownership.

Euan Fraser, Alpha's Global CEO, commented: "I am delighted to welcome the Obsidian team to the Alpha Group. This acquisition enhances and extends the Alpha Data Solutions' 360 SalesVista product offering, for which we continue to experience strong client demand. It also strengthens the Group's work with hedge fund clients, brings Alpha a highly skilled product development team and creates a strategic growth opportunity with a recurring revenue model. Following our recent successful Axxsys acquisition, this transaction demonstrates Alpha's focus on highly selective bolt-on acquisitions, as well as continued organic expansion globally."

Lazar Radenovic, Obsidian's CEO, commented: "We are very excited at this significant milestone as Obsidian joins forces with Alpha. We have successfully grown the Obsidian business in recent years developing awarding winning financial products and, having collaborated with Alpha's product development this year, I believe that being part of the Alpha Group is the very best place for us to achieve our corporate growth ambitions leveraging Alpha's leading market position in the wealth and asset management sector."

Enquiries:

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About Alpha FMC:

Alpha FMC is a leading global provider of specialist consultancy services to the asset and wealth management industry. Alpha FMC has worked with 80% of the world's top 20 asset managers by AUM, along with a wide range of other buy-side firms. It has the largest dedicated team in the industry, with c. 400 consultants globally, operating from twelve offices spanning the UK, Europe, North America and Asia.

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