Centerbridge Partners LP has agreed to acquire IPC Systems, a provider of financial trading communications systems, data services, and a financial extranet to trading floors, in a deal worth about $1.2 billion.
The private-equity firm Silver Lake Partners is selling IPC, which it bought in 2006 from the private-equity arm of Goldman Sachs for $800 million, Reuters reported this week.
"This is an inflection point for us," David Brown, senior vice president and managing director of the financial markets network at IPC, told us. "We think it will be a good partnership we have with them and to build on business and propel the growth of the IPC business."
Centerbridge Partners, a private investment firm with offices in New York and London, focuses on leveraged buyouts and distressed securities.
"We got to know the team very well, and they had an understanding of the capability," Brown said. The deal is expected to close next month.
In terms of growth areas, regulatory compliance is a huge element of the business right now, he said. "IPC will look to add incremental functionality, and the Unigy platform allows us to do that. We think we are uniquely positioned across the trading system and network business."
Part of this will hinge on expanding the firm's Unigy integrated software platform and its mission-critical data and network services.
Brown said IPC has already gone through a business transformation in the past few years. He cited the introduction of Unigy, an integrated Internet Protocol-based trading, communications, and applications platform. IPC also launched its Bluewave App Development Platform, which gives firms access to an application programming interface and software development toolkit to develop their own applications. It plans to expand into trading workflow.
IPC is a leading provider of data connectivity services through Connexus, a financial markets extranet for mission-critical market data and order execution. It also offers direct connectivity to exchanges, ECNs, ATSs, and global capital markets firms.
Neil Barua, IPC's chief executive, told Fortune that the new owners recognized the value in IPC's business. For the fiscal year that ended Sept. 30, the company delivered "the second-best year it's ever had." Revenue grew about 10% from the previous year, to around $500 million.
Barua, a former Silver Lake operating partner, stepped in as interim CEO in February and took the permanent role in August. "It made sense to begin a process to find a partner that would take us into the new era," he said, given the number of years that Silver Lake had been in the business with IPC.
The company's network services and data business is growing 37% a year, he said, and "51% of all things that happen on global trading floors happen on IPC systems." He talked about accelerating Unigy deployment and putting more compliance-related applications on top of it.
IPC serves more than 5,000 customers at banks, broker dealers, hedge funds, and investment management firms in 60 countries, with an installed base of 12,000 trading positions deployed worldwide. The firm has more than 900 employees in the Americas and the EMEA and Asia-Pacific regions.Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio