Centerbridge to Buy IPC for $1.2 Billion

IPC—which was sold to Silver Lake in 2006 for $800 million in a deal with Goldman Sachs Capital Partners—is now led by former Silver Lake operating partner Neil Barua, who joined as interim CEO earlier this year and will drop the "interim" tag going forward.

"With Silver Lake, IPC was a portfolio company for eight years as part of its second fund, and with it now on its fourth, it's easy to see that we're a bit long on the timeline," Barua tells Sell-Side Technology. "There wasn't an immediate need to sell, but 2014 was our second-best year in terms of revenue and one of our largest booking years as well, with Unigy in particular capturing the marketplace. Another piece for me was a personal one. To become CEO, I wanted to make sure we have a partner for five to seven years for us to grow with, so we began looking at other partners, and were surprised by the number of firms interested. Centerbridge, with their specialty in debt finance, really knows how Wall Street works, and can see the value in data. It's also one of the fastest growing private equity firms in the world; they raised another $6 billion dollars for a fund this year alone."

Data and Enhanced Services
For their part, Centerbridge has followed IPC for several years. “We are excited to back IPC and its management team through its next phase of growth and development," senior managing director Jared Hendricks said in a statement. "IPC is uniquely positioned to deliver tailored, state-of-the-art solutions to serve the complex needs of the financial services community. We look forward to continuing to support IPC’s momentum.” 

To that point, Barua says IPC will continue to leverage its existing influence on "51 percent" of global trading floors and 5000 voice communication installations by adding additional compliance-related recording, analytics, and "layering on mission-critical data applications" on the back of its networking capacity, uptake of which have grown 40 percent year-on-year.

He also emphasized that the firm will "redouble" its commitment to exclusively serving financial services, where others in the space have diversified to other industries.

Another area of emphasis is the provider's enhanced services, which has already taken over major institutions' operations surrounding embedded recording and analytics, service desk support, patch and application management. "That also includes managing things running on the trading floor outside of our own offerings, so it gives us insight into things we should be working on in house, as well," Barua says.

Grand Ambitions
As for IPC's ambitions going forward, the CEO says the Centerbridge deal will allow it to "accelerate" both product development and client capture going forward.

"With our 5000 sites, on the data side we believe there's a lot of market opportunity to capture everything that's non-proprietary, and allow technology providers to grab the eyeballs of the sell and buy side going forward," he says. "We also envision some inorganic moves around compliance-related and productivity applications within the trading environment. We don't think a lot has been innovated in that area, so that will be interesting in the next 12 to 18 months."

As for Unigy, the ambition remains as it always was, huge yet simple: "Continue the march towards putting the platform on every trading floor in the world," Barua says.

The parties have 60 days to complete the deal following satisfaction of customary closing conditions and approvals, which is expected in January 2015. IPC was advised in the transaction by Evercore and Goldman Sachs. Centerbridge was advised by Barclays and Credit Suisse Securities (USA), who are also providing debt financing for the transaction.