Based on numerous sources in recent days (remember we are not a news outlet but even we like to hear things from more than one source), we expect to hear the official announcement next week that Treasura has been sold by Thomson to Wallstreet Systems. This is interesting information on several dimensions.
- Limited Development. Selkirk was acquired by Thomson some years ago. With the giant merger between Thomson and Reuters the amount of attention left for the Treasura TWS (cash system) was essentially nothing. Development of the product moved into a near suspended-animation state. Accordingly, sales slowly morphed into a discount-the-price strategy. Additionally, it became painfully clear that many clients have become increasingly disappointed in the lack of attention paid to the product. Something had to give because it wasn’t getting the attention it needed.
- Wallstreet Acquisition Binge. Buying up Speranza (BAM – bank account management), then CityFinancials (Cash/Risk TWS/TMS) and now Treasura (Cash TWS/TMS) all in less than a year is absolutely heady stuff. We don’t think they are trying to copy Sungard’s acquisition model from the 90’s and early 00’s. However, we do look forward to hearing their business strategy fully articulated clearly for this situation. Some suspected reasons are noted below.
- Thomson Exits a Distraction Gracefully. Thomson/Reuters is a massive organization and a TWS provided far too little revenue to be anything more than a distraction. However, having hundreds of important customers who depended on their TWS software meant they were stuck supporting it. If only they could exit this business gracefully. Selling this to a well known TWS/TMS provider allowed them to do just that. They have placed it in the hands of an organization where Treasury Workstations are the business and not a distraction.
Possible Reasons for the Acquisition by Wallstreet (WSS):
- Client Base. Acquiring north of 350 clients with an annuity revenue stream allows WSS to rapidly increase the number of companies they serve and leverage some of their other offerings through this distribution channel.
- Sungard. Buying Treasura keeps these customers out of the hands of Sungard or some other competitor.
- Truly Fill in Their TWS Suite of Offerings. The nearby exhibit shows that Treasura sits in the same Cash TWS slot that Wallstreet Treasury (WST) occupies. WST has achieved some level of growth over the past decade, but is dwarfed in sales volume by Treasura. This could help WSS play in this area if they are aggressive in the right way. While some may raise issues about what this may mean for WST, TWS firms seem to support their offerings since the generate profitable maintenance income.
- Center of the Chessboard Strategy. As noted in the first item, acquiring more clients will allow them to leverage their other services on a modular basis. Having several hundred more clients makes for an easier sales an integration process over time. See related article.
- Because They Can. Generating cash can drive the need to put it to use. Having an opportunistic war chest allows WSS to take advantage of various situations.
- Salespeople. Acquiring a large customer base is pleasant. They may have also looked at the added benefit of scooping up some good sales talent that can now offer a fully suite of products – who will no longer be restricted to peddling the cash space TWS.
Wallstreet has much work to do to make this a success. They need to provide clear communication to Treasura clients and restart the development work immediately. The action in the first three months will be telling.