Will give risk management provider bigger backing for growth; further consolidates TMS market.
Reval, a SaaS provider of treasury and risk management services has agreed to be acquired by Dublin-based ION Investing Group. ION offers workflow automation software services to financial institutions, central banks, governments and corporates, according to a press release.
Reval announced it has “entered into a definitive agreement to be acquired by ION Investment Group” and says it will close the deal sometime in the fourth quarter.
Jiro Okochi, Reval CEO and co-founder, will stay on after the acquisition to lead the initiative to build a stronger treasury presence for ION. He said ION was attracted to Reval because if its risk management expertise and its successful experience as a SaaS provider. Through ION, he said, “we’re backed by a bigger, stronger company with a strong multi-brand strategy in treasury.”
ION, a holding company that has through the years acquired and consolidated financial technology companies, bought into the treasury systems market in 2011 when it acquired Wallstreet Systems, now Wallstreet Suite (WSS). By way of WSS, its stable of brands now includes Treasura, City Financials, and IT2. The company historically has been less than forthcoming about what plans it has for these brands once they are acquired; and how they all will fit together remains to be seen.
According to Enrico Camerinelli of the Aite Group, it can be useful from a sales and marketing perspective for treasury services providers to share knowledge of their systems. He writes that Aite research has found that “corporate treasurers expect treasury systems vendors not only to build and sell software but also to generate thought leadership, share knowledge, and disseminate information across the community of treasurers.”
Mr. Okochi said that going forward it will be his job, “to make sure the market place understands the brands.” He adds that each brand will continue to be independent, whether there is overlap in offerings or not, and that any product chosen by a client will continue to be available. And Reval, he said, will continue to enhance its treasury and risk offerings going forward as well.
“ION has proven to be very opaque to analysts on how they manage their TMS business,” Mr. Camerinelli in an email. However, “I expect that Jiro in his new role will ensure that ION will be more transparent and proactive to get info out to the marketplace.”
From a market perspective, Mr. Camerinelli said the ION-Reval deal “further consolidates the (already asphyxiated) TMS market.” He added that it also opens up opportunities for three types of players in the treasury management systems market:
- “Those who have already added functionalities to the ‘core’ TMS features to expand the coverage of the system (e.g., trade finance, supply chain finance, capital markets, risk management, FX).
- Those that have a large footprint in the more basic accounting management software (e.g., Intuit), adding capabilities that serve the needs of small firms that want to replace Excel spreadsheets with more efficient (but cheap) software.
- Regional banks, that white-label existing software solutions from domestic vendors (that cater for country-specific regulatory requirements and limitations) and offer the applications through their portal.”