The Board of financial services software group, IT&e Limited (ASX: ITE), is
pleased to announce completion of the previously announced acquisition of the
business of Treasury Management Systems, LLC ("TMS") – a New York based provider of treasury management systems to the global financial services sector.
Description of TMS’ Business and Products
TMS’ product, Monarque®, is an application suite supporting trading and treasury management at major banks and broking houses, comprising multiple integrated modules designed to automate the front, middle, and back-office functions. Monarque provides deal capture and position keeping functionality to
dealers, traders and middle office personnel, and is easily configurable to
integrate with a range of applications deployed throughout the global markets’
trading systems environment.
Monarque represents a complementary addition to IT&e’s suite of products,
Razor for risk management, and PTX (Private Trading eXchange) for the direct
and indirect web-based distribution of products from Banks to their customers.
Monarque will provide IT&e with the capability to extend its value proposition to also cover the dealing room and middle office through the enablement of
sophisticated deal capture and position keeping functionality. Razor, PTX and
Monarque will together represent a powerful offering to Banks commencing with
deal pricing and origination through to online distribution to customers and other third parties, such as brokers or other financial institutions.
TMS’ Client Base
The acquisition of TMS provides a significant boost to IT&e’s current client base and reinforces its presence in the UK, European & American markets.
Today, IT&e now supports nine major banks and financial institutions from their
offices in New York and London, including:
• Brown Brothers Harriman – New York
• Bear Stearns – New York & London
• Chicago Mercantile Exchange/GFX Corp - Chicago
• Danske Bank AS – New York
• Zivnostenska Banka – Prague
• Deutsche Postbank AG – London
• Fortis Bank - New York & Curacao
• KBC Bank – Brussels and Singapore
• LBBW – Stuttgart
Details of TMS’ Business
TMS has been in business since 1993 and has operated profitably in every
financial period to date.
TMS’ core customer group provides a consistent revenue stream made up
primarily of customization and after sales service and maintenance revenues. For the 2005 calendar year TMS is currently negotiating two substantial version
upgrades with existing clients.
With this acquisition IT&e has gained a very strong presence in New York and
through the highly recognized and skilled US team from TMS will be able to roll
out our Razor and PTX products suite across the TMS client base and other
Terms of the TMS Acquisition
IT&e has acquired the TMS business assets from TMS effective 1st November
2004 ("Effective Date"). These business assets included IP, customer contracts,
receivables from the Effective Date, plant & equipment, and the TMS premises
leases. IT&e has also hired TMS’ existing employees to its offices in London and New York.
The consideration payable by IT&e to TMS is principally in IT&e’s shares (ITE).
The consideration payable as follows:
• Initial share consideration approx. 300,000 ITE shares
• Tranche due on 31st October 2005 – max of approx 2.6 Million ITE shares
• Tranche due on 31st October 2006 – max of approx 2.6 Million ITE shares
• Tranche due on 31st October 2007 – max of approx 2.6 Million ITE shares
Other than the Initial share consideration, the ITE shares to be issued in the
Tranches mentioned above are subject to satisfaction by the TMS business of
specified financial performance targets in those periods.
Benefits to IT&e from the TMS Acquisition
IT&e expects the TMS acquisition to generate the following business benefits:
• TMS has an existing sales and business presence in the US Markets,
which will provide a very strong beachhead for IT&e in the Americas.
• TMS’ customers, who represent nine leading financial institutions in
America and Europe, will provide a solid foundation for IT&e to build sales
of its products - PTX, Razor and Monarque.
• Monarque’s functionality is considered to be a strategic fit with IT&e’s PTX
and Razor products, and has been operating in mission critical ‘24x7’
deployments for over 10 years.
Quote from TMS’ Customer
Ruth Mackaman, Vice President Foreign Exchange, e-FX Marketing and Product
Development, Brown Brothers Harriman & Co., New York, remarked:
"We have been working closely with TMS for many years to create software
solutions tailored to our very specific business needs. They have always shown
us 100% commitment, and have a stellar track record in delivering the solutions
they develop for us. The acquisition by IT&e brings to TMS the technology
resources they’ll need to maintain their leadership in developing software that is inherently flexible and adaptable."
Quotes from IT&e
James Maranis, CEO of IT&e commented:
"This is our first acquisition in the strategy which we have articulated to our
shareholders to expand in America and Europe by acquiring synergistic products
and businesses with an existing installed customer base.
We have acquired a solid existing revenue stream and relationships with some of
the world’s leading financial institutions. In addition, the existing New York based operations of TMS, and the local knowledge of TMS management of the
American and European markets, will provide IT&e with a solid base from which
to sell our Razor, PTX and now Monarque products."
Henri Feuga, President and founder of TMS added:
"I am convinced that the combination of IT&e's cutting-edge technology and
TMS's 11 years of expertise in Treasury and Capital Markets will result in one of the best products in the field.
My experience dealing with IT&e management has been very pleasant and I am
looking forward to working with a very professional team."