Triple Point Sale – A Poorly Kept Secret?

Its being widely reported, both in the press and through the grapevine, that the buyer for Triple Point is ION Trading. ION is a Dublin-based software vendor whose products have been primarily focused on the financial services space. They have been an active buyer of solutions in the last couple of years, most recently having picked up FFastfill, an electronic trading solutions provider, earlier this year.

Adding additional credence to the rumors and reports, ION did arrange some $800M in debt financing in late April/early May, apparently to support the deal. Should the Triple Point acquisition get closed, it looks like it will be ION’s first foray into the physical commodities side of the business (honestly, their website may be the worst I’ve seen for a company that produces several hundred million dollars in revenue per year).

If the rumored price of $800million (updated from a previous estimate of $750M) is correct, it will reflect an estimated 4x multiple of revenue and 12x multiple of operating margin; in-line with many of the larger acquisitions done in the CTRM space over the last couple of year, including the Welsh Carson investment in Triple Point in October of 2011.

Its also been noted in the rumor mill that the closing of the deal is taking a bit longer than anticipated, as there has apparently been a couple of sticking points that have yet to be overcome. Given that the deal has been widely reported by Bloomberg, it would clearly be in the best interest of Triple Point to get it done as quickly as possible in order for them to fully elaborate their strategy under their new owners (even if that strategy is the same as its been) and ease any concerns that potential buyers may have. Given the success that Triple Point has seen with their “Commodity Management” message and product direction, one would assume that the message coming out of the acquisition would be “we’re going to keep doing what we’ve been doing”, but until the new buyers or Triple Point management says so, there will still be an outstanding question there.