Data Base Software Firm Sybase to Buy Home Fin'l Network
Power, Carol, American Banker
Sybase Inc. said Wednesday that it would acquire the Internet banking software vendor Home Financial Network, making it the latest in a string of mainstream technology companies to target opportunities in Internet retail banking.
The $130 million stock and cash acquisition, along with Sybase's existing Financial Server business unit, would form the base of a new financial services Internet company. The subsidiary would be a vehicle for Sybase to move beyond its currently limited role in financial services, where it has had the most success as a provider of data base software, mainly to trading floors.
Sybase's intent is to "create an Internet global financial services company," said Michon M. Schenck, vice president and general manager of the Sybase Financial Server unit, who will become president of the new unit.
Sybase plans to invest $25 million in the new company, which has yet to be named. Emeryville, Calif.-based Sybase expects that the subsidiary would earn annual revenues of $100 million within three years.
Other large technology companies have also become active in building software specifically aimed at the financial services industry. Oracle Corp. and Sun Microsystems Inc., for example, have both begun selling systems to support electronic bill presentment and payment.
According to Tower Group, Sybase commands 68% of the data base market among firms associated with the Securities Industry Association. The company "doesn't have that kind of presence on the retail side," said Lawrence Tabb, senior analyst at the Tower Group. For that reason, the acquisition of privately held Home Financial "makes a lot of sense," he said. "It will leverage its middleware to the retail side."
Though Sybase says it holds the No. 1 position in the data base market worldwide and has a 17.5% share of the data base market among banks, insurance companies, and brokerages firms, it has struggled in recent years. Its revenues dropped from $1 billion in 1996 to $868 million in 1998. …