Thomson Reuters Acquires Redi, Looks to Grow Buy-Side Trading Capabilities

The terms of the deal were not disclosed, but Rishi Nangalia, CEO of Redi, tells WatersTechnology Redi will function as a wholly owned subsidiary of Thomson Reuters. The acquisition is expected to close by the end of the fourth quarter, pending regulatory approval.

Redi's trading capabilities will be integrated into Eikon, Thomson Reuters' desktop, and Elektron, its suite of data and trading propositions. Michael Chin, global head of equities at Thomson Reuters, tells WatersTechnology the acquisition is about the vendor's long-term strategic view of growing its presence on the buy side.

"Over the course of the past year, we've evaluated in the market the various assets that we thought would be a really good fit. We immediately honed in on Redi because it checked all the boxes for us," Chin says. "One was about brand, reputation and commitment to staying focused on delivering to customers. The other was really about the technology, and the fact that there is a lot of common ground with respect to Redi's approach and Thomson Reuters' approach to being an open platform. And thirdly, it was really very much about cultural fit—taking a very hard look at whether or not these two companies can come together, achieve a very deep integration and basically get to a point where very quickly we're acting as a single fully integrated organization."

Long Time Coming

It's been a long journey for Redi, which was originally founded in 1992 by market maker Spear, Leeds and Kellogg. In 2001, it was acquired by Goldman Sachs, and then spun out into an industry-backed consortium in 2013 that included Bank of America Merrill Lynch, Barclays, BNP Paribas, Citadel, and Goldman Sachs, among others. Along the way, Redi also folded some other EMS providers into the firm, including Bank of America Merrill Lynch's InstaQuote platform.

For Nangalia, all those steps were part of the natural progression of the firm and put it on a path that would eventually lead to this type of acquisition.

"When the industry consolidation trend became even more real, and we finished the work of becoming a true broker-neutral platform, it was extremely obvious to have the dialogue with Thomson Reuters," Nangalia says. "This fits perfectly to take Redi from being a broker-owned platform to a consortium platform to a completely independent technology company under the Thomson Reuters umbrella. For us, it's been a long and very well-defined journey as well."

Integration Time

The focus going forward will be to completely integrate Redi into Eikon and Elektron. Chin says the fact that both firms have an open platform approach should make things easier.

He also cites Thomson Reuters' app studio, which is essentially an app store, as an example of the experience it has with these types of integrations.

"Having an understanding of how you integrate these types of apps, how you deliver or use very robust application program interfaces (APIs) to do this, we feel pretty comfortable that this is something that we can tackle," Chin says. "Nothing is straight forward. The integration of something like a Redi has to be very deep into our infrastructure, into our technology. So there is definitely going to be some work to do, but we have a very good idea of what we need to do. And we've had the experience of doing it before."

Nangalia says Redi already has several deep connections with Thomson Reuters' product suite and market data, and the two teams have been working alongside one another for a while to understand how the two technology stacks are complimentary.

The firms will take an iterative approach to the integration, according to Nangalia, aiming to integrate some low-hanging fruit initially and then building on top of that, all while collecting client feedback along the way. He declined to get into specifics around exact deliverables that would be integrated first, but said pre- and post-trade tools will be an initial focus, highlighting analytics, total cost analysis (TCA) and market data as areas the firms will start with.

In terms of when clients can expect the full integration will be completed, Nangalia says it's too early to set a timeline, and believes the process will be driven by the clients.

Those clients, according to Nangalia, have been supportive of the acquisition thus far. Within an hour of the announcement of the deal, he says he'd received 15 to 20 emails from clients supporting the decision. Redi employees also have had a positive outlook on the deal, according to Nangalia.

"I think the teams here, just from the initial feedback, are extremely excited because they understand the benefits that we get from being part of a larger family. And as much as it's fun to be a 100-some person shop, there are some privileges that come along as part of a larger family from a product-suite standpoint," Nangalia says. "From a work standpoint, it's going to be business as usual alongside some exciting initiatives as we start doing some cool things together."