Continuing in its strategy to consolidate and create a dominant position for itself in the treasury management system market, Wall Street Systems announced the purchase of City Financials on June 2. “City Financials is a great fit for Wall Street,” noted Larry Ng, managing director for corporate development at Wall Street Systems. “We now have a full range of the best treasury solutions and services in the marketplace.”
Here are a few highlights from the deal:
- Picking up 50 installs. UK-based City Financials is a well-regarded niche TMS provider with 50 installations, mostly in Europe. Its customers include British Telecom, Cadburys, Imperial Tobacco, Emerson Electric, Rio Tinto, Time Warner and Whirlpool. CF’s main product, eTC (efficient Treasury Control), offers a fairly comprehensive range of functionality, with strengths in in-house banking, multilateral netting and position management. However, according to Ernst & Young’s Treasury Management Systems Overview (2010 edition), privately owned City Financials’ 2008 profits were just £50k on revenues of £1.9million. While 2008 was a tough year, these numbers are indicative of how difficult it is to be a niche TMS provider.
- A Quantum leap? eTC was launched in 2001 by people involved in developing the original Quantum platform. With eTC, they set out to fill a void they saw in the treasury systems market for technology which is flexible enough to fit most firms’ existing treasury
practices on a platform that could be delivered via the Internet. The product works in both a traditional Microsoft client/server environment and on the web via a .Net framework. No doubt, they also looked to fix a few things in the original Quantum, which, now in the hands of SunGard, is Wall Street Systems’ chief rival in the corporate TMS space. While Quantum has come a long way in the interim, adding CF and its product knowledge adds to this TMS rivalry storyline. - Filling a gap in the Wall Street portfolio. Wall Street Systems says it will integrate City Financials’ corporate treasury product into its existing portfolio, where it will sit between Wallstreet Treasury, aimed at mid-tier corporations, and Wallstreet Suite, which targets large corporations and central banks. City Financials will continue to be offered as installed software at the client’s site or as software-as-a-service (SaaS).
- Coupled with improved eBAM functionality. The City Financials deal follows Wall Street Systems’ late-April acquisition of Speranza’s electronic bank account management tool. This eBAM (SaaS) solution will be integrated across the full Wall Street product suite.
With added capabilities in in-house banking for a broad swath of corporates and eBAM, two key treasury system functionalities in high demand these days, Wall Street appears to be on the right path from a strategy point of view. Key to its success in pursuit of this strategy via acquisitions, as with its SunGard rival, will be making this statement from its press release unchallengeable:
“Wall Street Systems has a successful track record in acquiring and smoothly integrating companies while improving the experience for new and existing clients.”