Continuing to divest itself of nonstrategic businesses, Bankers Trust New York Corp. said it is selling its 49% stake in ADS Associates Inc., a software firm that makes treasury management and trading software.

The management of ADS, based in Calabasas, Calif., is buying back the shares.

The bank wants to focus its resources on selling its own software products, said a source close to the bank.

Since Bankers Trust acquired its equity interest in ADS in 1985, the bank has developed its own dealing software, called Remos, which runs on a mainframe and competes directly with ADS' Global Trader software, which runs on networks of personal computers.

Spinning off

Global Trader has been installed at Norwest, and is the fastest growing part of the software firm's business. ADS also sells treasury workstation software.

Bankers Trust will continue to distribute ADS' Global Trader to European customers who want a PC-based system.

ADS' software is installed at about 500 sites worldwide, and the company has been consistently profitable, according to ADS' president, Greg Pond.

Bankers Trust has sold or spun off several units over the past year in order to focus on core business.

In October, the bank sold its BankStat unit - a bank credit analysis firm - to Institutional Investor Inc., a division of Capital Cities/ABC Inc. for an amount that was not disclosed.


Bankers Trust also spun off its check processing facility into a joint venture with First Fidelity Bancorp. aimed primarily at cutting the cost of the operation.

"Bankers Trust's decision to sell the interest in ADS was based on our continuous review of our businesses and practice of divesting equity interests that are no longer required within our business strategy," David L. Hinds, managing director of Bankers Trust, said in a prepared statement.

In addition to selling dealing software, ADS is one of the market leaders in treasury workstations, a market that banks have not found profitable.

Field Thinned

Other market leaders are ICMS International, San Bruno, Ca. and Chemical Banking Corp.

Bankers Trust's exit from the treasury workstation market leaves Chemical Banking Corp. and Chase Manhattan Bank as the only major banks in the market.

In the 1980s, dozens of institutions began selling treasury workstations. But after a few years, most banks, including BankAmerica Corp. and Mellon Bank Corp., left or scaled back their presence in the market, where there proved to be little demand.

Today, fewer than 10 competitors market the systems and only several hundred workstations are sold a year, industry officials say.

In October, Citicorp abandoned its treasury software product, called CitiIntegrator, referring its customers to the remaining nonbank software vendors in the market.

The ADS management buyout is being partially financed by Silicon Valley Bank, a $1 billion-asset bank that specializes in lending to high-tech companies.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.