SIA SHOW: NYFIX Gets FIX With Javelin

When Nyfix, a supplier of trade-order-management systems, first began building a Financial-Information-Exchange engine to use internally, it considered making it available on a commercial basis. However, after surveying its competition, it opted against it. Javelin Technologies, after all, was at that point a rising star in the new FIX market. "We entered the FIX-engine space and decided not to make our engine commercially available because of Javelin's engine on the market. They were such a strong competitor that it did not make sense," recalls Bob Gasser, chief executive officer, Nyfix Millennium, a Nyfix operating unit. Although, Nyfix continued to use its own FIX-engine internally, the concept of offering its clients a FIX engine kept nagging at the electronic-trading supplier.

As of March, Nyfix got what it wanted -- not in the way it had originally planned -- but by purchasing Javelin. George Kledaras, Javelin chairman and chief executive officer, says, "Nyfix had approached us a while back and it wasn't something we were ready for at that time." However, when Nyfix approached the company again, toward the end of last year, Javelin was looking for funding and the timing was right, he says. Gasser adds, "We had a personal relationship with them that allowed us to strategically discuss a potential union over time." He would not say exactly when the discussions began.

At he SIA Technology Management Conference and Exhibit today, the two will share with clients how the acquisition will affect them, "The thing that we have in common is that we are both built on the open standard of FIX. Our products hit one segment of the market and theirs hits the other, notes Kledaras, explaining that Javelin has traditionally focused on the buy side and Nyfix on the sell side. Gasser adds that Javelin was also a good fit because it is more global than Nyfix. "They have already been pushing into Asian and European countries, something that we have been wanting to do," he says."We now have a very powerful offering -- we took a dominant FIX-engine vendor and combined it with a firm that is great at distributing applications," Gasser notes. He adds, "We now have the ability to offer the plumbing and software in a bundled service."

Already the Javelin and the Nyfix teams have gotten together for a large-scale sales and marketing meeting to rollout their cross-selling strategy. At the meeting, the reps on both sides gained a greater understanding of all offerings to provide them with the ability to sell both products, notes John Coulter, president and chief operating officer, Javelin.

For now Javelin will remain an independent operating unit of Nyfix. Gasser says that some of the cost synergies have already been realized, citing that Javelin's products and applications have been moved over to Nyfix's data center. He adds that real estate might be an additional area where cost savings can be made. As far as combining the two companies, he says, "There may be opportunities where it might (be) reasonable to combine the firms in the future, however, right now, it is working." He also points out that Javelin had already had a big headcount reduction in October, so layoffs were not in the plans for the time being.

Gasser, Kledaras and Coulter feel confident that they are now offering something that no one else is. As for the future, Gasser notes, "We will be opportunistic and see if there are other applications we would distribute to leverage our existing assets."

Javelin will have its own booth at the SIA show and is releasing two new products. The first is an upgrade of Apia, Version 2.0. The second is an upgrade to FIXBox, which is a FIX engine designed for hedge funds.