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Stargate has sold its technology division to Rubik Financial for $35 million after rejecting similar offers over the years.
Chief executive Brett Spencer said the division had attracted numerous offers since being founded in 1998, most of which were valued around $35 million.
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“I’ve always said that as a business owner my business is always for sale for the right price to the right people – and Rubik are the right people,” he told The Adviser.
Mr Spencer said Rubik stood out from the previous suitors because it had similar clients to Stargate, a proven commitment to the financial services industry and a shared vision.
“We want to be the single biggest platform provider of desktop and mobile solutions to the financial services industry,” he said.
Mr Spencer added that the new group had ambitions to grow into a billion-dollar business. Rubik posted revenues of $14.9 million for the 2013 calendar year.
Rubik will pay Stargate $20 million upfront and up to $15 million more depending on earnings in the next two financial years.
Rubik has also executed a binding agreement to acquire Infinitive for $2.4 million upfront and up to $14.1 million more subject to revenue growth over the next 18 months.
The two acquisitions will make Rubik “Australia’s largest independent supplier of mortgage desktop applications and second largest supplier of mortgage transactional gateway software”.
Stargate and Infinitive together handle about 25 per cent of all third-party mortgage settlements, according to Rubik.
Mr Spencer will become Rubik’s managing director of mortgages. He told The Adviser that he and the Stargate management team had committed to stay with Rubik for at least five years.
He said it would be “business as usual” for Stargate clients, with no changes to prices or service or customer agreements.
Mr Spencer also said that the Infinity acquisition would mean an enhanced electronic gateway for Stargate customers.
