Seeking stronger links to banks' investment product businesses, mutual fund colossus Fidelity Investments announced last week that it has agreed to acquire Broadway & Seymour's trust systems business.
Officials at Charlotte, N.C.-based Broadway & Seymour said they will receive about $30 million from Fidelity for the unit, called the Asset Management Services Group.
This unit's core software product, called Amtrust, is used by 14 of the 50 largest banks, which represent more than $400 billion in discretionary trust assets.
The sale of the unit "allows Broadway & Seymour to concentrate on its core competencies of providing customer service and financial industry technology solutions along with our existing investment and professional services businesses," said Alan Stanford, Broadway & Seymour's president and chief operating officer.
The deal follows an alliance between the two firms last year, that would allow trust banks to connect their accounting systems to Fidelity's massive mutual fund clearing system.
Since that time, Broadway & Seymour has undergone a broad reorganization after reporting big fourth-quarter losses last month.
Stephen Shook, an analyst at Interstate Johnson Lane in Charlotte, said the trust division was expected to have revenues of less than $25 million this year.
"Since Fidelity and Broadway & Seymour announced their alliance, other trust systems vendors have jumped in to offer similar capabilities." said Mr. Shook. "I think Fidelity wants to ensure they'll stay competitive. And they have very deep pockets."
"We continue to believe this is a growth market where there is an opportunity for innovation in technology," said Paul J. Hondros, president of Fidelity Investments Institutional Services Co.
