American Management Systems is to acquire the brand and trade processing technology of Proponix, a trade finance joint venture company initially established in conjunction with ANZ, Barclays Bank and Bank of Montreal.
Proponix was launched in a blaze of publicity in June 2001 with the intention of providing outsourced back office processing and technology to banks in the trade finance business. However, the company has only succeeded in signing up original Proponix partners ANZ and BMO for the full back office outsourcing service. Proponix in Hong Kong also offers electronic processing services to Barclays Bank.
As of September 2002, Proponix had processed 280,000 international trade transactions with an aggregate value of $12 billion.
Under the buy-out proposals, AMS will take over the operation of the Proponix application service provider (ASP) models and continue to process business transactions for its erstwhile venture partners ANZ and BMO. Both banks will insource operations staff ceded to Proponix when the regional hubs went live.
Nadeem Shaikh, a senior principal consultant in the financial services business at AMS, says the vendor will press ahead with an ASP model for service delivery in the short to medium term. He claims the company has a sales pipeline of some 25 banks, including three global institutions.
The transaction is expected to close in March 2003. Financial details have not been disclosed.
AMS last week secured a $160 million three-year credit agreement for general corporate purposes and acquisitions.