Last week's revelation that the venerable London Stock Exchange (LSE) had agreed to acquire Sri Lanka's Millennium Information Technologies (MillenniumIT) came out of the blue for many Sri Lankans. But what might prove stranger still was how the idea for LSE's buyout offer initially originated.
In an exclusive interview with the Sunday Times FT, MillenniumIT's Chief Executive, Tony Weerasinghe, opens up about the background of the LSE transaction and the direction in which the company he founded is now headed.
First, how did LSE go from MillenniumIT's potential client to its probable parent? "We knew that LSE was looking for alternatives to its TradElect platform.
However, we've been in a lot of situations where Millennium, even whilst providing the best solution, was overthrown by the customer’s Board, due to the size of our balance sheet. Once we knew we were the clear winners coming out of the technical committee, we didn't want the same to happen with LSE. Therefore, we asked whether they would be interested in a stake", says Mr. Weerasinghe.
He adds that LSE was pleased with this suggestion as they wanted to "ensure that none of their competition would buy us" and LSE eventually countered with a proposal for acquiring a majority stake of MillenniumIT. Further, the LSE buyout already seems to have positive effects for MillenniumIT. "[Some] of the prospective customers who are in the pipeline, who were debating our balance sheet, will now have the comfort of awarding these sales to us.
Two have already committed and the third is coming to Sri Lanka before the end of the month", notes Mr. Weerasinghe. Also, he reveals "there'll be plenty of capital injections, more hiring and ramping up of operations soon", a situation which will no doubt help MillenniumIT's future dealings.
Also, there appears to be yet another aspect of this deal which Mr. Weerasinghe eagerly anticipates: “On numerous occasions we have lost deals and have not even been invited to take part in [Request For Proposals] due to the fact that we are not an exchange. Our competition comes from large exchanges, namely NYSE/Euronext, NASDAQ and Deutsche Borse. As you know, these are three giants in the world and the reasons for traditional exchanges to select them are more than technology", he says, adding: "Now, with LSE, we will have the same status that they enjoy, with better technology".
Meanwhile, he indicates that not much will change in the day-to-day running of MillenniumIT. "There will be no impact to our current business. The difference is now we have a tier 1 exchange as a client. Millennium will supply any product that we sell as to any major client", according to Mr. Weerasinghe. He continues that there will be "a separate team as [with] all our big clients like ICAP and AMEX for LSE.
With respect to the other IT requirements where Millennium does not have any products, LSE will invest in a separate outsourced software development unit for LSE.
This will come under direct LSE management where LSE will source programmers from Sri Lanka”. “Millennium has never been in the outsourcing business and never will, therefore we will continue to innovate and come with products for all our clients", affirms Mr. Weerasinghe. For now, the future seems bright for this Sri Lankan success story which, momentarily, remains the toast of 'the City'.
A company spokesperson said the company name will remain unchanged. |
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