Head office (D+H): 140 Broadway, 40th floor, New York, NY 10005, USA Tel: 212 497 1820 Other offices: 37 offices in India, Australia, Israel, UK, Switzerland, Germany, Wales, Ireland, and US Website:www.finastra.com | www.dh.com Contact: Stacey Leone, PR director. Email: stacey.leone@dh.com Founded: 1923 (John H. Harland Company in 1923, Harland Financial Solutions in 2000) Ownership: D+H was public and listed on Toronto stock exchange Number of staff: 1700


Priority Solutions and its Tradewind trade finance system. There was also an incomplete payments system called Tradecentre. At the time of the takeover by Phoenix, both systems had been taken by New Zealand-based ASB Bank. Tradewind was a fairly good fit alongside the Phoenix system, particularly in developing markets, resulting in a number of combined deals.


In mid-1998, Phoenix also made an equity investment in a US-based service bureau, Servers Online. It also acquired Miami-based Eras JV. On top of the acquisition activity, the company also expanded its own operations internationally, recruiting a number of top executives.


By the end of 1998, Phoenix was, on paper at least, in a healthy position, with the system taken for around 130 sites, with 27 new licences sold in the second quarter of 1997 alone,


Changes of ownership


By late 1999, the company was in a parlous state with net losses for 1999 at $13.8 million and sales all but dried up. In late 1999, Phoenix made a bid for the outsource market by establishing an Application Service Center and acquiring two existing domestic US outsource processing operations. In early 2000, after a joint bid, UK-based London Bridge


Software Holdings took a 9.7 per cent stake in the company. About this time, Phoenix gained a couple of orders but the optimism was short-lived as the company had to announce that its year-end audited figures for 1999 needed to be revised and the losses were even greater (now $15.7 million). It then went on to announce a further review of the 1997 and 1998 figures. All this resulted in a number of class actions brought against the company by disgruntled shareholders. In the latter half of 2000, London Bridge announced that it had entered into an exclusive agreement to acquire the company outright. The deal finally went through in early


a 1997 net profit of $3 million and contracted revenues of $21.2 million. Then, it all went sour. Early 1999 saw a profits warning and Phoenix shares went into free-fall on Nasdaq. It was difficult to establish what went wrong, but it would seem that an overly ‘flexible’ pricing policy combined with the geographical expansion certainly had something to do with it. In addition, the Unisys relationship had not lived up to expectations, and sales in the US had not reached the expected target, partly due to deferred decisions because of Y2K. There was some light on the horizon, with three deals gained in Turkey. In the end, however, Phoenix, like other suppliers before it, found that the Turkish banking market was difficult, with all three banks cancelling before completion, even though the system had successfully benchmarked for the higher volumes.


2001. London Bridge gained virtually all the assets and some liabilities while Phoenix retained the class action liabilities which it undertook to settle for a combined payment of around $4.2 million. Phoenix undertook to withdraw from markets which had proved unprofitable. In Africa, the source code was licensed to Nigeria-based Computer Systems Associates (CSA), which took over the marketing and development rights on that continent. A heavily-tailored version of the system, called Equinox, also came to be sold by a specially-formed CSA offshoot, Neptune Software. The Phoenix product name was retained by its new


parent and the system combined with the London Bridge- developed Vectus CRM and Debt Manager offerings. The Phoenix development center remained in Orlando. Under the ownership of London Bridge, an SQL Server version of Phoenix was completed. However, London Bridge itself had a rocky 2002, which saw a sharp drop in its share price; its progress with the Phoenix system became steady-to-slow. Development largely shifted to South Africa. In the US, in mid- 2003, a five-year deal was signed with Georgia-based Flag


US Financial Services Technology Market Report | www.ibsintelligence.com 47


company details


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