Reuters has acquired Application Networks, a risk management software provider based in London and Palo Alto, for $41 million in cash to accelerate the growth of Reuters Trade and Risk Management.
The acquisition supports Reuters ‘Core Plus’ strategy of extending its range of pre and post trade services.
Reuters Trade and Risk Management practice generated revenues of GBP82 million in 2005. It provides traders, heads of desk and risk and operations managers with a suite of trade and risk management software to address core risk issues.
Application Networks provides the cross-asset derivatives trading platform, ‘JRisk’, which is already in use at banks such as JPMorgan Chase, Societe Generale, UBS and Wachovia. It recently signed a distribution agreement with GlobeOp – a provider of packaged services to hedge funds.
Reuters says that with this acquisition it aims to become a market leader inside two years in the GBP1.5 billion global market for trade and risk management systems.
Reuters and Application Networks clients will be given the opportunity to migrate to a new platform within the next 24 months. This will be called ‘Kondor+ 4.0’ and will combine JRisk’s upgradeable services orientated architecture with the functionality of Kondor+. Before then Reuters will release staged upgrades to existing JRisk and Kondor+ users as the platforms converge.