SunGard/AvantGard, the world's largest supplier of treasuryworkstations, announced last Friday that it had reached anagreement with XRT Corp., a subsidiary of France's Cerg Finance, toacquire XRT's two high-end workstation brands, TWS and Globe$. Withthat move, acquisition-happy SunGard, with headquarters inCalabasas, Calif., has again bought an erstwhile rival to expandits portfolio of treasury workstation products, shrinking thenumber of vendors while enhancing the potential of investment inupgrades.

While SunGard technically bought the U.S., German and Belgiansubsidiaries of XRT, it actually acquired the TWS and Globe$brands–XRT's high-end treasury workstation products, their customerbase and the rights to market those products anywhere in the world,explains Ken Dummitt, president of SunGard/AvantGard. According toDummitt, SunGard secured three valuable assets in the deal: aprestigious portfolio of customers, a staff of talented people andgood products that “complement our present offerings.” While hesuggests that SunGard is likely to stretch its AvantGardinfrastructure umbrella to cover the new XRT products, he admits,“We know and respect those products from competing against them.You don't learn everything about a new product until you get underthe covers with it. But at this point, we see the XRT products asfilling in gaps among our other AvantGard products.” With theselatest additions, “those gaps in our treasury applications arefilled,” he adds.

Now, SunGard is focused on expanding its AvantGard footprintinto the payment space beyond treasury operations and isconsidering a range of buy-versus-build decisions about how toexpand that offering, Dummitt explains.

The loss of French-owned XRT came as little surprise. Many ofthe foreign-owned treasury software companies, XRT among them, havestruggled to make sales in the less saturated U.S. market or havebeen absorbed by powerful domestic rivals in deals like Wall StreetSystems' (WSS) purchase of French-owned Trema, Thomson's buy of theCanadian-owned Selkirk and SunGard's acquisition of British-ownedIntegrity. The rewards for SunGard are apparent: XRT still has manyof the blue-chip clients that SunGard covets, observes treasurytechnology veteran Glen Solimine, CEO of financial technologyprovider Speranza Systems Inc. in Scarborough, Maine, and a formeremployee of both SunGard and XRT. “Culturally, it should be a goodfit, and it will be great for XRT clients to have a vendor with aclear path forward,” Solimine says. “SunGard has a greatclient-support structure that XRT users will appreciate.”

XRT was once a dominant player and still has good clients in theU.S., notes Mike Gallanis, a principal at Treasury Strategies Inc.Since XRT was acquired by Cerg, its greatest success has come inFrench-speaking countries, and by spinning off U.S. operations,Cerg may be choosing to focus on that core business, hespeculates.

Snapping up XRT is a much-practiced move for SunGard. It hasbeen the treasury technology giant's enduring strategy to acquiretreasury software providers and attach them to its “formidableinfrastructure,” notes Maggie Scarborough, research manager forcorporate banking at Financial Insights. “When they can pick up acompany for a relatively cheap price, they usually do.” Indeed,SunGard has prospered by acquiring and merging two or threecompetitors, using that scale advantage to weaken its rivals inmarket competition and then buying those faltering rivals atattractive prices and adding further to its scale advantage.

For SunGard, the XRT portfolio also represents a ticket tobetter global credentials, an important factor when it faces WSS incompetitive bidding, TreaSolutions President Dan Carmody says.“Once SunGard learns what XRT customers require, they should beable to migrate them over time to the most appropriate SunGardupgrades,” he explains. If SunGard, as expected, incorporates thebest features of XRT systems into its cross-platform AvantGardfunctionality, it will have another set of tools to attractpotential new customers, Carmody points out.

With the XRT acquisition, Scarborough observes, the vendor rankshave thinned to just four major players: SunGard, Wall StreetSystems, Simcorp and Thomson. “After that, there are just a fewsmaller players–Kyriba, Chesapeake Systems, Misys and the remnantsof Gateway,” she points out. Thomson is selling the system itacquired from Selkirk “like gangbusters” to the middle market andthe low end of the large corporate market, while WSS and Simcorpfocus on large, sophisticated treasuries and SunGard has “somethingfor everyone,” she reports.

At almost the same time SunGard was acquiring XRT, State StreetBank was acquiring Currenex, a foreign exchange portal. StateStreet already owns FX Connect, so consolidation drivers continueto work across the treasury technology spectrum.