Telekurs Buys S&P Trading Systems And Its Ticker III Feed

Telekurs (North America) Inc. is the new proprietor of Ticker III. In a deal announced June 30, Telekurs acquired the assets of Standard & Poor's Trading Systems from McGraw-Hill Financial Services Co., thereby ending one of McGraw-Hill's less spectacular forays into the electronic information business.

The acquisition puts two non-U.S. firms, Zurich-based Telekurs AG and London-based Reuters Holdings PLC, in nose-to-nose competition for the professional digital data feed market in North America. Telekurs Ticker III is the market-share leader in the category, followed at a distance by the Reuter Marketfeed 2000. Through a worldwide redistribution agreement, Telekurs had been the largest customer for Ticker III.

The assets acquired comprise everything in SPTS except the S&P name, says Telekurs (North America) president Bill Howard. They include the various market data services, New York and Chicago offices, computers and software resident at the McGraw-Hill data center in HighTSTown, N.J., and 74 people, many of whom express delight at the new ownership. When the sale was announced there was "yodeling in the halls" at SPTS headquarters at 11 Broadway, says one.

The sale price wasn't announced, but is thought to be in the area of $10 million, or about $40 million less than McGraw-Hill paid for Trading Systems predecessor Monchik-Weber Corp. five years ago. Throughout those years -- with numbing regularity -- the unit was reorganized, refocused and reshuffled from one province of McGraw-Hill to another. As a result, a permanent mood of uncertainty hung over the organization and often seeped through to customers, several of whom expressed relief at the sale.

Although Telekurs rarely buys other companies, and has never done so in North America, Howard says its decision to buy its U.S. data supplier shouldn't come as a surprise. "This was the last market area in which we were not in control of our own quotation processing," he says, calling the Ticker III third-party source an "interim solution." The company's plans for its new Stamford, Conn. data center once included eventual construction of a ticker plant.

It was the prospect of this eventuality that led McGraw-Hill to question the long-term future of the SPTS business, says Michael Hehir, executive vice president at S&P/McGraw-Hill. "We had known for a while and it was a concern to us that [Telekurs] had wanted to be more independent," he says. To press ahead with expensive technical development of a new ticker feed in the face of a major revenue loss was risky and not central to the information delivery strategy of McGraw-Hill's business, says Hehir.

Telekurs, meanwhile, was facing a buy-or-build decision with regard to its planned ticker plant. "They approached us earlier this year about the desire to acquire the technology," says Hehir. This was something McGraw-Hill wasn't willing to do without selling the entire business, a demand to which Telekurs ultimately acceded.

Adding the SPTS staff almost triples Telekurs' U.S. payroll, so Howard is expanding the company's management ranks. Vince Contino, who until recently ran the old Bunker Ramo data center for Automatic Data Processing Inc., joins Telekurs as vice president, operations. Two veterans of the Unisys Corp. Snapnet venture, Fred Pennino and Ron Wybranowski, will take over as vice presidents of sales and marketing, respectively. S&P veteran Tom McDonald will become vice president, engineering development.

Besides integrating his new management with the staffs of the two companies, Howard's short-term priorities are to move the ticker plant from HighTSTown to Stamford and to bring the long-promised Ticker IV feed to market. The ticker plant move will include a hardware upgrade from Data General MV20000 to MV40000 processors, he says. The existing Telekurs Tandem installation will be used for network control and data delivery. With the Telekurs database behind it, Ticker IV is now expected to boast improved international content.

"We still will continue to focus on providing digital data," says Howard, both through wholesale redistribution arrangements and through third-party systems integrators like Unisys Snapnet. Ticker III wholesale customers include Japan's Quick Corp. and U.S. vendors like Bloomberg, Bonneville and Data Broadcasting Corp.

"I'd like to see us focus more on working with groups where the data is a supplemental element to an application," Howard says, rather than "somebody who just wants to buy the data and go out there and pretend that they're a quote vendor." For example, he says, trust accounting and trading applications would be preferable to straight quote terminal replacement.