ADP Plans To Buy ISS; Makes Convert Of Ark

AUTOMATED Data Processing Inc. has signed a letter of intent to purchase Investment Software Systems Inc. (ISS), a Littleton, Mass.-based software vendor that primarily develops and markets news processing and news management services for buy-side institutions. Meanwhile, in a separate deal--driven by the impending purchase of ISS--Ark Asset Management Co. has decided to switch from its Shark Information Services Corp.-supplied retail quote service to ADP's FS Partner platform to support its traders and portfolio managers.

By snatching up ISS, ADP would be attempting to strengthen its presence in the institutional marketplace, which has lately been a hotbed of activity for the quote vendor: Just two months ago, ADP released its so-called Prime Partner for Windows platform--a version of its FS Partner retail quote service targeted for money management firms (see related story, this issue).

Though spokespeople and officials at both ADP and ISS decline to comment on ADP's impending acquisition of ISS, it appears likely that ADP will integrate ISS' flagship product, the so-called ISS News Analyst, with its FS Partner quote platform after the acquisition is completed. In fact, Paul Cucurullo, an MIS manager at Ark Asset, says that ADP has already set plans to integrate FS Partner with ISS News Analyst.

Cucurullo says that this is one of the reasons that Ark Asset, a client of ISS' News Analyst product, decided to dump Shark in favor of ADP. "We just switched from Shark to ADP and one of the reasons was that ADP was looking to integrate the ISS news product into their quote service," he says. "As far as ADP buying [ISS], I think it's a good idea.... We were looking at ADP versus ILX [Systems Inc.'s quote platform] and one of the reasons we chose ADP is because we knew they would have an advanced news product integrated with FS Partner."

An ISS spokesperson declines to comment on either the number of clients the vendor currently has or on the impact ADP's impending purchase of ISS will have on those clients. But Cucurullo says that the impending acquisition will give both vendors a boost. Says he: "They [ADP] want to be able to--with ISS' news product--give [FS Partner] an added feature that the other products don't have right now.... You're going to have to wait a little while before ILX has the advanced news [feature]." But an ILX official says that while the vendor's quote platform cannot currently be integrated with any third-party news management systems, ILX does offer its own news management system called News Pulse.

In addition to using ISS' News Analyst--a news processing service that gives users access to multiple news wires via a single user interface--Ark Asset also makes use of ISS' market data management system, dubbed ISS Market Data Manager. But Cucurullo says that Ark Asset, which uses ISS News Analyst more extensively than ISS Market Data Manager, will soon migrate from ISS' market data management system to a system that is being jointly developed by ISS and Market Vision Corp. ISS Market Data Manager was designed to give users access to a variety of market data feeds via a central database.

The ISS spokesperson says that while ISS will continue to support clients using products other than ISS News Analyst, the vendor's primary focus will be to "actively market News Analyst in conjunction with our focus as a news processing vendor."

ISS News Analyst, which runs on Unix servers, processes news from an array of providers, including Reuters, Thomson Financial Services Inc.'s First Call Corp., Knight-Ridder Inc., Merrill Lynch & Co., Washington News Services and Dow Jones Telerate's Dow Vision. Cucurullo says that Ark Asset is pleased with the service ISS News Analyst provides.

"We have about 20 different news feeds coming into us and they all go into a central database and it gives us intelligent queries and profiling capabilities," he says. "And it allows the portfolio manager to search across all the different news feeds." Among the news wires that Ark Asset receives via ISS News Analyst, Cucurullo says, are Knight-Ridder, First Call, Merrill Lynch Reports, Dow Vision, Market News Service, Mainstream Newscast, CNN and Journal Graphics.

ISS, founded in 1987, has 15 employees. The company's officers--which include president Carl Tarabelli and vice presidents Gerald Kamitian and Tom Burke--own 90 percent of the company's capital stock; the other 10 percent of the shareholders are outside investors.