Bravura spends up to secure BoNY business in Europe

Bravura Solutions will double its staff from 270 to about 540 and have a presence in the new jurisdictions of Luxembourg, Dublin and Edinburgh following its proposed purchased of the Bank of New York (BoNY), Europe, transfer agency software business.

The deal, which followed a global tender, will boost Bravura’s fledgling UK presence from 33 to more than 250 staff and fast-track the introduction of several new interfaces for Bravura clients. Bravura will spend the entirety of its $40 million capital raising from its June IPO as well as dip into a $35 million facility provided by BOS International (Bank of Scotland). The deal proposes a payment of $A48 million on completion of contracts in December, and a further two payments, totalling up to $A31 million, based on earn-out thresholds. BoNY Europe will remain the largest client of the software business, known as Rufus Software. For Bravura, there are 11 new external clients as well as 66 “indirect” new clients through BoNY’s outsourcing arrangements, which remain a core part of its European business. The enlarged Bravura will have an EBIT of $19 million a year (up from $11 million) on revenue of about $120 million (up from $48 million). It will be involved in the administration of 17 million accounts (up from 11 million). Iain Dunstan, managing director of Bravura, said the BoNY Europe division was “a good profitable business” that could be run “a little leaner”. He said, for example, he would not be housing its servers in an expensive Canary Wharf building in London. There were several things planned for development by BoNY, such as tax wrappers, which Bravura already had and others which Bravura had planned, such as STP and SWIFT interfaces, which BoNY already had. “There are a lot of interfaces which we can bring back to Australia, such as the STP work,” he said. “People have argued that Australia should move to more of a TA (transfer agency) model.” Under transfer agency, the providers do all the transactions including equities and hedge funds as well as managed funds. Dunstan also said that the UK market was far larger than Australia, the deals were far larger and the staffing requirements were far greater. “I don’t think you can be in the UK without at least a couple of hundred people,” he said. “Big projects require a lot of people. It’s a scale business.” The Bravura share price, still rising from its $1.12 listing price late June, jumped another 27c to $1.94 following the announcement of the BoNY deal on Friday.