From the February 2011 issue of Treasury & Risk magazine

M&A Hits the Market For Treasury Technology

A blitz of deal-making hit the treasury technology space last month, as Wall Street Systems purchased the Treasura workstation from Thomson Reuters and Reval acquired ecofinance, a Central European cash management vendor.

The deals show the market for treasury technology is growing up, says Jeanne Capachin, a research vice president at IDC Financial Insights.

"When you have a relatively immature market, what you will see is a lot of small start-up vendors," Capachin says. "As a market matures, it just makes sense that vendors start to build scale and acquire some of the competitors.

"I see this as good, because now you're going to have a few well-funded providers," she adds.

Wall Street Systems and SunGard remain the biggest treasury software vendors, analysts say.

Wall Street Systems plans to integrate Treasura with its Wall Street Treasury system and City Financials, a London-based cash management system it acquired in 2010, to build a product targeting midsize companies. Enrico Camerinelli, a senior analyst at Aite Group, suggests midsize corporations are a promising market at this point, given their reliance to date on spreadsheets and their need to improve processes in the wake of the financial crisis.

Reval, which made its name with software for financial risk management and hedge accounting, enters the cash management space with its purchase of ecofinance. It plans to integrate its product with ecofinance's software-as-a-service model, ITS@web, to come up with a SaaS treasury solution.

Do the acquisitions point toward a more limited product selection for treasuries?

"Choices for corporate treasurers have certainly dwindled, to where there are just a few providers in the U.S.," says Reval CEO Jiro Okochi. He says that with its purchase of ecofinance, Reval is "the white knight coming into the corporate treasurers' space, so now they have another choice."

But Capachin argues that companies still have plenty of vendors to choose from.

Aite's Camerinelli says the deals in the cash management space show that treasurers need vendors that not only provide technology but also offer services, like consulting, and have experience integrating various systems.

"It's not new, it's been happening in ERP," he says. "But it's interesting to see that in the treasury space."

To read more about the Wall Street Systems' deal, see Treasura to Fit Into Integrated Product.

To read more about Reval's acquisition, see Reval Buys Treasury Provider.


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