NEWRY-BASED financial software business First Derivatives is in talks with the receiver of Cognotec Holdings with a view to acquiring the business.

Software firm Cognotec went into receivership on January 22nd after almost 20 years in business, with Kieran Wallace of KPMG appointed as receiver.

In an announcement to the Irish stock exchange yesterday, First Derivatives, which is a London AIM- and Dublin IEX-listed company, confirmed that it had entered into an exclusive agreement with Mr Wallace in relation to buying Cognotec.

A spokesman for First Derivatives said the deal was being finalised at the moment.

Subject to due diligence, a confirmation of the acquisition is expected within days.

No information on a possible acquisition price was disclosed.

It is believed that First Derivatives will run Cognotec as a going concern, on a standalone basis, if the acquisition is completed.

Although both First Derivatives and Cognotec are providers of technology to financial markets, they are not direct competitors.

Cognotec was established in 1991 by Dublin-born entrepreneur Brian Maccaba. The firm flourished as the internet boom took hold, winning some $60 million in venture capital funding.

Cognotec, which provides software for the foreign exchange market, was hit by the banking downturn and struggled to generate sufficient cash to service its debts. In the year to November 30th, 2008, Cognotec reported a pretax loss of $1.8 million (€1.3 million). It employs 65 people, 45 of them in Dublin. The firm also has offices in London, New York, Singapore and Tokyo.