SunGard MDS Buys Fame

SunGard Market Data Services (MDS) has signed an agreement to acquire historical data and data management software vendor Fame Information Services, it was announced last week. The move will help SunGard expand its data coverage while allowing Fame’s majority backer Warburg Pincus to spin off its investment.

The deal marks SunGard MDS’s entry into the reference data and historical data area, having concentrated on real-time data, particularly in the US retail equities market, before now. John Hyde, group chief executive officer for SunGard MDS, says the company has been looking to get into the reference data business for around a year.

SunGard MDS’s data warehousing and rule-based technology will benefit from reference data capabilities since both need a common data structure, he says. "Reference data is a rapidly evolving area and we thought it was a good time to leverage Fame’s services," Hyde says. He says SunGard MDS selected Fame for its track record, its ability to connect with industry standards and the progress it has had with its ReferencePoint product.

Hyde declines to comment on the company’s future plans in the reference data arena or on other potential acquisition candidates.

An industry source says the acquisition also fits in well with SunGard MDS’s Tradeline product, a research tool backed by a historical securities pricing database. The source adds, "This is the last remaining piece in terms of the STP chain that SunGard needed."

Yet it may cause further confusion in the industry over SunGard MDS’s strategy in the real-time arena. Some industry observers have noted that while the company has publicly stated its ambitions to move into the real-time institutional space, it does not seem to have made much progress.

But Hyde responds that SunGard MDS is "always looking to grow its business." The source adds that the company is aggressively going after real-time opportunities but declines to speculate on its strategy.

Fame will be run as an independent division of SunGard MDS and Dale Richards will remain president and CEO, says Hyde. "The plan is to let Dale and his management team manage as they see fit," he says. There are no plans for layoffs at Fame, he says.

The acquisition will not affect Fame’s strategy, product line or staffing, says Richards. He says the sale was motivated by majority owner Warburg Pincus’ decision to close the fund in which Fame is held over the next few years. Given the pending closure, "we wanted to seek out a more strategic fit," Richards says.

Warburg Pincus had signaled its interest in selling Fame last year, when it was thought to be unhappy with Fame’s growth and returns (IMD, April 8, 2002). However, it ultimately reinvested in the company, which then reorganized, with the replacement of Gerald Mintz as CEO with Richards and the elimination of Fame’s financial markets and energy division.

The acquisition, the terms of which were not disclosed, is expected to be finalized in the first quarter of 2004 following regulatory approval. It does not include Fame’s educational division, which will remain in the Warburg Pincus fund.

The deal follows the departure of Rick Snape, president of SunGard MDS, who left to join network provider Radianz last month (IMD, Nov. 24).