Pico, a provider of data center infrastructure, exchange connectivity and cloud technology, is set to acquire Corvil, a provider of network performance real-time analytics, in a deal that will provide clients with greater visibility into their managed trading environment.
The acquisition will provide greater transparency and access to data for clients who outsource their trading technology operations to Pico. Real-time data solutions like those offered by Corvil are increasingly important to help pinpoint latency concerns, optimize price execution and efficiently meet compliance obligations.
New York-based Pico is a long-time user of Corvil products. After seeing how quickly its operations staff were able to resolve issues for clients by using Corvil's products, Pico explored the possibility of acquiring the Dublin-based company and offering Corvil's real-time analytics directly to its clients.
"We installed Corvil extensively throughout our environment. If clients experienced an issue, they would call in and our operations teams would be able to determine very quickly the source of the issue by leveraging Corvil technology. For instance, a client might be oversubscribing and not have enough bandwidth," says Jarrod Yuster, CEO and founder of Pico. "We decided to go a step further and offer clients a direct view into their managed operations. With Corvil, we can deliver full transparency into our clients' trading and IT operations while addressing the challenges that come with rapid expansion into new global markets."
Corvil's real-time analytics can also be used by a client's front office staff to determine execution performance – such as fill ratios and tick-to-trade latencies – and correlate fill ratios to the performance of the network.
The move is the latest chapter in an aggressive expansion plan for Pico. The firm launched a colocation facility and direct connectivity to Hong Kong Exchanges and Clearing in May and plans to add another 16 data centers across Asia Pacific to its 35 existing data center locations globally over the next 18 months. It currently connects to more than 200 exchanges and trading venues worldwide, including a host of derivatives exchanges such as B3, Cboe, CME, Eurex and the London Metal Exchange.
Corvil will operate under the Pico brand, and the Corvil name will continue to be used for its portfolio of products and services. While existing clients of both Corvil and Pico will be able to access the same products and services as before, Pico will also offer "Corvil-as-a-service," which means clients will be able to subscribe to Corvil for a monthly fee and avoid up-front costs and ongoing training.
With a combined global client base of more than 400 banks, exchanges, asset managers, financial technology vendors and trading firms, the company will have a workforce of more than 375 staff with expertise in low-latency technologies, automation, machine learning and data science. Donal Byrne, CEO of Corvil, will take up the position of chief technology officer, reporting to Yuster.
Officials expect the acquisition to close in early August. Financial details of the deal were not disclosed because both companies are privately-owned. Pico is minority owned by a consortium of investors, including Goldman Sachs, JP Morgan, UBS and Wells Fargo.
C. Thomas Richardson, managing director and head of market structure and electronic trading services at Wells Fargo, tells MarketVoice that Pico’s infrastructure services and data/analytics segments will be significantly bolstered by the Corvil acquisition.
"With the addition of Corvil’s unique capabilities, Pico will be able to offer a full suite of services for those firms demanding both hardware services and software products to run their cross-asset and cross-border electronic trading businesses."