Questions surrounding leading treasury systems vendor acquisition answered behind the scenes.
In a press release today, Wall Street Systems made its first widespread public announcement of its being acquired: “ION Trading, a leading provider of high-performance trading infrastructure and automation solutions for capital markets, has completed the acquisition of Wall Street Systems, the global provider of treasury, trading and settlement solutions. No financial terms were disclosed.”
The release did not shed much light on ION Trading’s plans for the treasury management system business, nor what the impact would be on Walls Street Systems’ various offerings of corporate treasury systems. “Wallstreet will maintain its focus on providing treasury and trade processing solutions in its core markets of corporate treasury, FX, and central banking. ION will provide Wallstreet with long term ownership stability to allow a significant increase in focus on the development of products.”
It is puzzling that ION, or TA Associates, the private equity firm behind ION, have not said more publicly about their plans for what is one of the top two players in the large corporate treasury management systems (TMS) market (a Wallstreet spokesman today would only say that it was “all positive.”).
While analysts in the space have spoken favorably about the acquisition’s potential, there is little new information out there to back up the positives for treasurers looking for a new TMS. One line of thinking found in Aite analyst Enrico Camerinelli’s reporting is that ION will leverage Wallstreet to provide corporates with a more integrated treasury-to-trading platform solution, fitting the trend of the TMS as the core component of an integrated platform giving treasurers a holistic view of all their activities. This also fits with seller Warburg-Pincus’ original vision that Wallstreet had huge upside in building up its FX platform. Mr. Camerinelli sees this as especially important for ION as it seeks to build on Wallstreet’s expansion into the mid-tier of the market.
Consequences of silence. If this is true, then ION should be more proactive in its communication to Treasura users and potential users, solidly in this mid-tier segment, which already feared being orphaned when Thomson-Reuters sold it to Wallstreet at the beginning of this year. Another owner inside of a year is worrying, especially for the legacy Selkirk users among Treasura customers who never felt quite at home with Thomson. To what extent will ION continue to support recently-acquired products like Treasura, City Financials and even Richmond that originally served as the catalyst for the Wall Street Treasury, lower-end offering Mr. Camerinelli cites?
Major corporate names among Wallstreet user customers, both new and old, do report having had conversations with Wallstreet and its new owners that have made them comfortable—at least relative to other alternatives that are also private-equity backed (and thus have no guarantee of not also being sold). This suggests that Wallstreet/ION Trading does have a positive story to tell, but they need to get that story out there. The longer they wait, the more concessions they will have to make to keep ever- wary and cost-conscious corporate treasurers from looking elsewhere.