By Justin Baer
An instant-messaging software company that has drawn investments
from Goldman Sachs Group Inc. and other big banks signed a deal to
buy a chat business from a potential rival.
Symphony Communication Services LLC acquired an arm of Markit
Ltd., a financial-data firm that went public earlier this year, the
companies said.
The purchase, Symphony's first since a group of 14 Wall Street
banks and money managers helped start it in October, underlines how
Wall Street has quickly coalesced around the Silicon Valley startup
as a solution to one of the industry's most pressing technology
challenges: finding a way for employees to communicate with one
another, instantly and securely.
It also represents an exit for Markit, which a year ago had
launched its own messaging initiative for bankers and traders. The
sale isn't expected to have a material effect on Markit's results.
Fewer than 20 Markit employees are relocating to Symphony as part
of the sale of the unit, known as Collaboration Services, a person
familiar with the deal said. Terms aren't expected to be disclosed
when the deal is formally announced Tuesday.
David Gurle, Symphony's chief executive, said in an interview
that the company had considered building its own directory before
reaching out to Markit in recent weeks to discuss a potential deal.
In buying Markit's business, Mr. Gurle said Symphony probably saved
18 months of development time. "They had a capability we would have
ordinarily had to build ourselves," Mr. Gurle said.
The transaction includes the software that powers Markit's
directory service, which functions as a centralized "phone book"
for financial firms that can be customized to meet compliance
rules.
Symphony's emergence may help loosen Bloomberg LP's grip on the
securities industry. The financial-data company's chat services
remain ubiquitous on trading floors. But the price of a Bloomberg
terminal, about $20,000 a year, has grated on some finance
executives.
If Symphony's platform spreads quickly through Wall Street, bank
executives have said, it could pressure Bloomberg to relent. A
Bloomberg spokesman didn't immediately respond to a request for
comment. Bloomberg's news service competes with Dow Jones &
Co., publisher of The Wall Street Journal.
On Monday, Mr. Gurle said the messaging platform is still on
track to launch in July.
Led by Goldman, the financial firms invested $66 million in
Symphony. The firm in turn acquired Perzo Inc., a Palo Alto,
Calif., company founded in 2012 by Mr. Gurle. Goldman, which led
the investment among the financial firms, contributed its own
internal messaging developments to the venture.
Founded more than a decade ago, Markit had drawn investments
from financial firms such as J.P. Morgan Chase & Co., Bank of
America Corp., Deutsche Bank AG and Goldman. All four of those
banks were among the firms that have backed Symphony.
Markit sought to allow financial firms' in-house messaging
platforms to communicate with one another, he said. Symphony and
its backers are betting that financial-services firms need a better
system than they could develop on their own.
Write to Justin Baer at justin.baer@wsj.com
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