[ M A R K E T R E V I E W | M E R G E R S & A C Q U I S I T I O N S ]
the company , Ipreo displayed tremendous growth with revenues up 60 % and several new product launches , while also onboarding a raft of new buy-side clients and carrying out its global expansion strategies . For buy-side firms with data strategies at the top of their agendas for regulatory compliance , decision-making and performance optimisation , mergers such as this often provide an opportunity to re-evaluate their existing data set-ups and react accordingly . IHS Markit ’ s acquisition of Ipreo officially closed in early August , and Ipreo ’ s services are already being combined with IHS Markit ’ s in a bid to immediately add value for clients for both firms .
At the same time the news landed about plans to buy Ipreo , IHS Markit quietly announced it is seeking a buyer for its endto-end OTC post-trade processing business , MarkitSERV . There has been no movement on this one , at the time of writing , but the business recently entered into a partnership which saw the derivatives reporting segment of the business connect to CME Group ’ s trade repositories in Australia and Europe .
Best merger of equals : Itiviti & Ullink
The “ merger of equals ” tagline was thrown about a lot last year during Deutsche Borse ’ s wooing over the LSEG as part of its failed bid to create a German / British exchange behemoth . While this year hasn ’ t thrown up a deal with quite the same proportions ( yet ), the phrase seems to have stuck in people ’ s minds .
In a deal labelled a “ union of equals ”, trading systems providers Itiviti and Ullink completed plans to merge in March , forming a $ 200 million Franco-Nordic technology powerhouse . The combined entity now boasts more than 1,000 employees and a local presence in all major markets across Europe , Asia and the Americas . Integration work of the two product sets began in earnest in April shortly after the deal was finalised . Echoing that of Fidessa and ION Investment Group ’ s deal , the merger connects Ullink ’ s buy-side equities and derivatives trading products and services with Itiviti ’ s market making technology platforms that have predominantly focused on the sell-side .
Consolidation among trading technology vendors is an almost constant vein running through trading activity , as new and old firms alike are sized up and then devoured .
As Itiviti ’ s chief executive , Torben Munch , pointed out at the time of the announcement , increasing regulatory pressures and changing market structure means market participants are now looking for full-service technology vendors that they can truly rely on .
While much of last year ’ s M & A activity focused on vendors looking to bolster their back- and middle-office portfolios ahead of the introduction of MiFID II , the market has now turned its attention back to the sharp end of business and managed solutions , and deals of this nature may become a lot more common going forward .
Honourable mentions
High-frequency trading ( HFT ) continued to condense earlier this year following Hudson River ’ s move to buy rival market maker Sun Trading . Terms of the deal were withheld , but it didn ’ t come as much of a surprise to the industry , as high-speed trading firms continue to battle low market volatility , increasing costs and shrinking revenues . The trend continues from last year , when Virtu Financial was quick to snap up KCG last year in a deal estimated to be worth $ 1.4 billion as it looked to establish a HFT powerhouse .
Hot on the heels of State Street , SS & C Technologies confirmed plans to buy investment management software provider and Charles River rival , Eze Software , for a more conservative fee of $ 1.45 billion just one week later . Known for its penchant of hoovering up any business or product that takes its fancy , the acquisition of a well-regarded and widely-used OMS provider such as Eze should prove a salve to SS & C after its failed attempt to buy Fidessa earlier in the year . Another example of the shift among middle- and back-office service providers looking to gain front-office capabilities , particularly at a time when buy-siders are reviewing their OMS / EMS options .
54 // TheTrade // Autumn 2018