In a deal which appears to have taken some two years of on-off negotiations to come to fruition, SunGard has acquired the TimeSquare business of Toronto headquartered data management solutions vendor Soliton.
TimeSquare becomes part of SunGard’s referencePoint enterprise data management (EDM) managed services and solutions business. SunGard says there are no plans to make staff changes at Soliton at this time, and that business will continue as usual as SunGard determines its integration strategy. That said, it is believed that Soliton’s president and CEO Nazir Noormohamed will not be staying with the company.
Sources say Soliton’s datafeed handling technology and expertise – notably its capabilities around the Telekurs Financial Valordata Feed (VDF) – and its clients, in particular State Street, were key to its appeal to SunGard. Financial terms of the transaction were not disclosed. Soliton is believed to have been in good shape financially following the appointment in early 2004 of Noormohamed, its former chief financial officer, as president and CEO, with a brief to shape the company for a sale.
The sale has been some time coming. Reference Data Review reported in June 2005 that Soliton had appointed investment banker Kirchner & Co to contact potential buyers, following the collapse of negotiations during the first half of that year with a large software company, believed to be SunGard, about a possible acquisition. As Reference Data Review observed then, the data management systems space was and remains ripe for consolidation, both to rationalise the number of companies vying for financial institutions’ budgets and because bigger providers with stronger balance sheets are more appealing partners for firms seeking support for mission critical activities such as enterprise data management.
Francis Wenzel, vice president, product management for SunGard’s referencePoint solutions, says: “The TimeSquare business contains some very good expertise, which fitted with our requirement to increase our team in this area. It also has some very well-known customers; we have a few com-mon customers currently, but not for the same types of services. In addition, some of its technology is also very interesting.” Soliton says TimeSquare supports more than 60 vendor datafeeds.
It is believed Soliton’s experience of offering managed reference data services is also considered a good fit with SunGard’s ambitions in that space, especially as it steps up its targeting of the tier two players it considers ripe for the provision of outsourced data management. Late last year Soliton signed the first round-the-clock client for its managed reference data services offering, a US fund manager (Reference Data Review, November 2005).
Wenzel emphasises that SunGard will make use of TimeSquare for clients of both managed services and licensed solutions. “We don’t make a great distinction between managed solutions and licensed solutions,” he says. “It is the same technology. It’s a deployment issue: some clients have a preference for outsourcing, and others a preference to retain internal control.”
It is currently “too early to set out a timetable for the integration of the new capabilities into (SunGard’s) existing offering”, Wenzel continues. “We have only just closed the acquisition. The next step will be to sit down, review the details of what we’ve acquired and formulate a plan to take full advantage of the new capabilities.” There will certainly be some rationalisation, sources say, with the SunGard/Soliton clients ultimately running on the same platform, and client-sensitivity will need to be displayed when it comes to handling the transition to that common platform. Further acquisitions by SunGard in the data management space are not off the cards. “It is not that we have gaps in our data management offering that we are looking to fill; we approach this more on a case by case basis,” Wenzel says. We will consider acquisitions to achieve technology enhancements or incremental business, in order to allow us to better address specific target markets.”