Acquisition of Etrali Fuels IPC’s Global Goals

When IPC Systems was acquired by New York-based private investment firm Centerbridge Partners for about $1.2 billion, CEO Neil Barua said that deal would allow IPC to "accelerate" both product development and client capture going forward.

A little over two years later, IPC has finalized a major acquisition of its own: that of Paris-based compliance and unified communication services provider Etrali Trading Solutions, first announced in September last year.

Etrali's compliance-focused product portfolio will be merged with IPC's communications offerings, to form what Michael Speranza, senior vice president of corporate strategy and marketing at IPC, says is now a complete end-to-end solution for compliance and communication networking. While other players in the networking and communications space are diversifying their market offerings, IPC has taken the opposite approach and focused on its core strengths.

"It's very important that we are 100 percent focused on fintech," Speranza says. "Customers are now demanding a level of control and precision in their technology that is simply not available anywhere else. They also want it to be completely open, so that they can integrate it and adapt it to their environments."

Global Ambition

"Customers are now demanding a level of control and precision in their technology that is simply not available anywhere else. They also want it to be completely open, so that they can integrate it and adapt it to their environments."

Lionel Grosclaude, current CEO of Etrali, will join the bolstered IPC as managing director for the company's EMEA operations, while a new regional hub in Asia-Pacific utilizing the compliance work Etrali has done in the area, will complete IPC's global position.

The bottom line of the acquisition is the creation of a combined global network of 6,000 financial services firms with access to markets in over 700 cities in 60 countries, with the pooled portfolio of IPC and Etrali's products made available to the enlarged client bases in Europe and Asia-Pacific.

"It is enhancing our global scale, acquiring a significant presence around continental Europe, which IPC did not have in it's past, and we're building out our network community specifically in the region," Speranza explains.

Speranza states that there is no better statistic to validate the global growth of the company than that following the acquisition "nearly 50 percent of IPC revenue will be derived from outside the US."

In Flight

While IPC engages with the task of merging the two communications networks to create a global platform, it is also focused on furthering its growth ambitions.

"A critically important aspect is not just what the acquisition of Etrali does for us today, but where it is going to take us in the future," says Speranza. "It's going to give us significantly increased scale to expand on top of our current product set. There are certain things that are in-flight already, but will now be accelerated as a result of the Etrali acquisition."

Speranza says that clients are now also looking for things that the technology simply can't do today, and that IPC is working toward those goals by developing new features and capabilities, particularly in areas such as policy management, as firms demand increasing levels of granular control over decision-making.

IPC is preparing for further growth both "organically and inorganically," according to Speranza. "For example, the Policy Engine concept is something that we are actively building right now, whereby firms have been asking us to control their communications in a more granular method, stop certain interactions happening—ntercede them, record or don't record them, implement the jurisdictional walls in their environment—and that is something that we are actively building right now."

Prior to the acquisition of Etrali, IPC completed a deal for global voice and data network provider ASPone Networks in August last year, and the company will continue to review further procurement opportunities according to Speranza.

In the wake of the Centerbridge acquisition in 2014, Neil Barua told Waters that the company's goal was to put the Unigy system "on every trading floor in the world." Through the acquisition of Etrali, IPC has taken a significant step toward fulfilling that ambition.

The Bottom Line

• By acquiring Etrali Trading Solutions, IPC has added a new tranche of compliance systems and services to its portfolio, as well as significantly increasing its global presence, particularly in Europe and Asia-Pacific.