Broadway Technology has announced the acquisition of FX OMS provider Barracuda FX – terms of the deal have not been revealed.
With the deal, Broadway says it will continue to expand its product suite and deliver its multi-asset solutions across more parts of the investment lifecycle while allowing clients to automate additional workflows.
The Barracuda FX business will continue to operate on a standalone basis, meaning there will be no reduction in staff. Barracuda CEO Kieran Fitzpatrick and Maurice Curran, COO, will continue to run the business, they will also, however, assume senior roles leading Broadway’s FX business as head of FX and head of FX operations respectively. The firms stress there will be no impact to any existing Barracuda integrations.
“This deal is a very natural expansion of our strategy, it’s very synergistic,” says Tyler Moeller, CEO of Broadway Technology. “By adding Barracuda FX to our product suite we are creating a complete set of capabilities in fixed income and FX that simply are not available from other vendors. It is a natural continuation of our growth, which was explosive last year.”
For Barracuda, Fitzpatrick says the deal will allow the firm to become more meaningful for clients. “The vendor market in FX is very fragmented, there are a lot of players with elements of the full technology stack, but no-one with a complete solution,” he says. “It is inevitable that the market will coalesce at some stage, so we think we are taking the lead in creating this full service solution.”
Moeller, for his part, sees the acquisition as a reinforcement of the Broadway value proposition. “Our view of the world is that clients need innovative, cross asset technology to support their trading businesses, and our core platform, the TOC, delivers this. We started Broadway with the vision of providing clients with the ability to deploy a complete end-to-end solution or to take components and then overlay their IP. This deal adds another vital component to our product set that sits across trading, risk, data and regulatory solutions.”
Although Fitzpatrick and Curran are to head the Broadway FX business, the deal also allows them to deliver on another vision they have had for some time – extending the capabilities of the OMS into fixed income markets. Moeller notes that while fixed income markets are not as automated as FX, things are changing and clients are demanding greater efficiency in their fixed income businesses.
This is music to the ears of Fitzpatrick who sees real potential for the OMS in the new asset class. “We have been looking at how we expand into fixed income for a while now, looking at how we build out the connectivity in this space,” he says. “Broadway already has this, so it allows us to accelerate our work and increase our presence as part of the clients’ tech stack.
“So we will work to deliver the FX strategy of the combined firm, but we will also have a voice at the table that will create and deliver the broader, cross asset strategy,” he adds.
The two firms have worked together informally with certain shared clients, something Moeller says was part of the attraction of the deal, and they are keen to stress that feedback from both shared and the firms’ unique clients has been encouraging. “As part of the due diligence process we spoke to clients and the feedback has been universally positive,” says Fitzpatrick, while Moeller adds the response from Broadway’s client base has been “fantastic”.
He also observes that Barracuda has “a very happy client base, who are excited at the possibilities for the combined business”.
The deal certainly appears to make sense for both parties – Broadway acquires an established firm with deep experience in FX technology, while Barracuda gets the opportunity to scale an already successful project. Moeller is, unsurprisingly, optimistic about the business going forward. “This is a transformational acquisition, he says. “Barracuda is among the best in the industry and represents a tremendous level of institutional and industry credibility, and we are excited to work with them and deliver our solutions side-by side.
“We’re thrilled for Kieran and Maurice to bring their years of FX experience and customer-centric focus to Broadway and assume responsibility for running our newly combined FX business,” he continues. “Broadway is entering the next chapter of its evolution and this management expansion enables us to continue leading innovation in both FX and fixed income on our unified multi-asset platform, while focusing on each segment as its own distinct market with unique structures, business needs, and customer demands.”