Alphameric Gets FTT, CP Technology In Trading Systems Buying Spree

"This is an unfashionable time to be buying things to do with dealing rooms," says Alphameric PLC chairman Dougal Craig-Wood. But that didn't stop Bishopsgate Ltd. parent Alphameric from buying systems integrator CP International Inc. and turret manufacturer Financial Trading Technologies Inc. of New York.

The two recent acquisitions broaden Alphameric's product line while expanding its installed base of trading system clients. The combined operations of Bishopsgate, CP, and FTT will be managed by ex-FTT principal Douglas Timms. Joseph Cunningham, former managing director of CP, will serve as director of sales and marketing for the combined enterprise.

Alphameric paid approximately $1,550,000 for FTT and a mere $530,000 for CP Technology. "We're contrarians," says Craig-Wood, "We buy things when they're cheap and make use of them when the market bounces back."

Alphameric's acquisition binge isn't over yet. Negotiations with Systems Designers PLC may soon lead to Alphameric's purchase of SD Financial's Tradepoint trademark and its Boston-based trading systems integration operation.

The Tradepoint system, installed last year at the Bank of Boston's home office, is built around Bishopsgate's DIS -- Dealing Information System -- technology, which in turn relies on software developed by SD. Alphameric recently purchased the rights to SD's DIS software for $2,465,000.

The acquisition of CP moves Alphameric into third place behind Reuters/Rich and Control Data Corp. subsidiary Micrognosis Inc. in terms of installed base of dealing screens, according to Craig-Wood. Some observers liken the FTT purchase to Reuters' acquisition of turret supplier LHW Wyatt. Alphameric is also a minority owner of Tantus Microsystems Ltd., designers of a graphics tablet-based deal capture system.

The European market for trading room systems has seen a marked shift toward "digital" or hybrid solutions using a server-LAN- workstation architecture. Successful trading system suppliers in this marketplace need expertise with off-the-shelf hardware on standard and non-standard computing LANs.

Bishopsgate has specialized in building enormous single-network trading rooms based on proprietary hardware and broadcast communications. Two 750+ position trading rooms -- at Kleinwort Benson and Barclays de Zoete Wedd in London -- constitute more than 75% of Bishopgate's 2000-position installed base.

Bishopsgate is not well positioned to single-handedly attack the new "open systems" marketplace. CP, on the other hand, has plenty of recent experience with off-the-shelf hardware, standard computing LANs, and session-oriented data communications. CP's installed base of 1400 averages 50 positions per room.

CP's MIX -- originally CMIX for Chase Manhattan Information Exchange -- includes value-added networking software designed to link a variety of market data servers, in-house processors and off-the- shelf workstations. MIX was originally developed for Chase Manhattan's Big Bang trading room in London and then enhanced for Banque Indosuez in Paris.

Some of the MIX goodies whipped up for Indosuez' Paris room include an IBM PS/2 interface, a real-time spreadsheet, a computational analysis server, a conversational TELEX handler, a complete Reuters Monitor Dealing service keyboard emulation, and a remote workstation interface.

Bishopsgate and CP complement each other geographically as well as technologically. While Bishopsgate is exclusively in London, CP's most recent work has been in Paris and New York. CP maintains offices in New York, Paris, London and Brussels.

Fortunately for Alphameric there is potential synergy, as well as complementarity between Bishopsgate and CP. By a happy coincidence, both companies' software development teams relied exclusively on the "C" programming language. Alphameric doesn't intend to announce any form of merged architecture in the short term, but many possibilities exist.

Ideally, Alphameric will be able to offer customers the advantages of Bishopsgate, or CP, or both. "What will emerge," according to Craig-Wood, "is a turbo-charged CP system, while some functionality of CP will migrate to Bishopsgate." The end result may be similar to the architecture provided by CAP Financial Services Ltd., which extends both a high-speed broadcast bus and standard Ethernet out to trader workstations.

But if the European market is leaning toward off-the-shelf hardware on trading LANs, how did CP manage to lose over $3 million last year and get picked off by Alphameric this year?

CP had not been doing well in London because, "the effort of moving from their MFX video system to MIX really consumed them. Their key resources started to look inwards rather than outwards," says Craig- Wood.

To make matters worse, CP had to buy out Chase Manhattan's interest in MIX before completing its installation at Banque Indosuez. But the coup de grace for CP was without doubt the generally depressed non- Japanese market for trading systems.

"We're entitled to believe that this gloom will dissipate," says Craig-Wood, "and in the meanwhile, even if there's no fun to be had in New York or London, there's a great deal of fun to be had in Japan."