Private Equity News & Analysis

TA Associates buys SmartStream from 3i

In the latest in a string of investments in the financial technology sector, the Boston-based firm has acquired 3i Group’s majority stake in software vendor SmartStream Technologies.

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TA Associates has bought 3i Group’s majority interest in the UK-based financial technology company SmartStream technologies.

Terms of the deal were not disclosed, but TA said in a statement that the investment would enable the company to accelerate growth and possibly pursue an eventual floatation.

3i led a management buyout of SmartStream in 2000 in a deal valued at ÂŁ122 million ($230 million), with 3i investing ÂŁ76 million. In July word began to spread that 3i was interested in selling its stake in the company for a reported ÂŁ80 million, but the price tag was reportedly too high.

SmartStream’s 1100 customers worldwide include 75 of the world’s top 100 banks. The company’s technology is used to match trades and correct errors during transactions. In a statement TA said SmartStream currently holds a 38 percent market share. Earlier this year the company announced record full-year profits resulting from strong software sales, but did not announced what those record profits were.

TA has been making significant investments in the financial technology sector in recent months. The firm’s investments in the sector include AIM Management Group, eSecLending, The Intercontinental Exchange, ION Trading Group, Lava Trading, OpenLink Financial and Thomson Advisory Group.

Ajit Nedungadi and Jonathan Meeks from TA Associates will join the SmartStream board, replacing non-executive chairman Lord Blackwell, non-executive chairman Mark Austen and CEO Martin Brown. The company said Brown will remain as chief executive in the short term and assist in selecting a successor.