OMX said yesterday that it will further tighten the focus of its technology businesses by divesting those aimed at banks and brokerage firms, as opposed to exchanges, clearing organizations and central securities depositories.
To reflect the sharpened focus on what it calls “marketplaces,” OMX has hired Markus Gerdien – currently Executive Vice President Markets and Business Development at Observer, and was previously President of Front Capital Systems – to take over from Klas Stahl as President of OMX Technology.
Today, OMX provides securities services software and business services to banks and broker-dealers. But the group reckons it lacks sufficient scale to continue. “There is currently a need for consolidation within the industry and OMX has decided to take an active part in this by announcing its plan to divest its banks and brokers business area to other industry partners,” the company said in a statement.
OMX says discussions with prospective buyers are “ongoing” and an agreement is expected to be signed during the Fall. Until then, OMX will provide service and support to current customers as usual.
The discontinuance of the banks and brokers business area is expected to have an annual impact of approximately SEK 350 million on OMX’s revenue and to improve operating profit on an annual basis by approximately SEK 60 million, based on the levels of operations of the second quarter 2005.
Today’s initiatives are not expected to result in any immediate redundancies at OMX.
“We expect a transaction with an industry partner to create economies of scale for customers and increase the efficiency of the securities transactions infrastructure, especially in the Nordic region,” says Magnus Böcker, President and CEO of OMX. “Finding an industry partner already active in the business will enable us to secure continuity for customers and to safeguard the skills and expertise we have developed in this area. At the same time, we will focus on future growth in the marketplace segment, possibly through complementary acquisitions.”
The reorganization of the technology business includes replacing the current business area matrix organization with a functional organization. Which is why Markus Gerdien is taking over from Klas Ståhl as President of OMX Technology.
“Klas Ståhl has headed the technology division during a phase of restructuring,” explains Bocker. “This phase is now completed and a change of leadership is natural. I would therefore like to extend my thanks to Klas for his contributions over the years. I would also like to take the opportunity to welcome Markus Gerdien on board. His background from both the industry and international sales makes him particularly well suited to lead the company forward.”
Gerdien said he was “happy and excited” to join OMX. “I believe that my more than 13 years of experience from the IT and finance industry and my background from international sales and marketing, will help lead the technology division further,” he said.