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Transactions

July 2012
New York, New York
has been acquired by
Hamilton, Bermuda


Background

Correlix, a fast-growing provider of software and analytic tools used to monitor and manage ultra-high-speed, high volume electronic securities trading environments, was founded in 2005 by Shawn Melamed and received institutional backing from Blumberg Capital, Genesis Partners, Sequoia Capital, Vernon & Park and Xenia Venture Capital.    The company established sales and administrative offices in New York City and a development center in Herzliya, Israel.  The company’s customer base rapidly grew to encompass some of the most sophisticated hedge funds, sell-side and buy side firms as well as market centers and low-latency service providers.  These clients use the Company’s services to discover, trace and optimize complex transaction flows and to monitor latency throughout the entire electronic trade flow process across multiple asset classes in 30+ markets  in the US, Europe and Asia. 



Overview

Correlix approached Marlin & Associates (“M&A”) and asked for strategic guidance as they considered a variety of options including raising growth capital or a sale of the Company.  M&A organized a team to work with Correlix’s management and its Board to produce information materials and prepare for due-diligence reviews.  As part of the process, M&A identified key strengths and weaknesses, and worked with the Company to present the firm in the best light to multiple potential partners.  

The process ultimately generated interest from financial sponsors as well as from strategic firms.  Ultimately, the Board decided to pursue an additional internal funding round, completed in early 2012.

Shortly thereafter, two of the previously interested strategic firms approached Correlix about restarting discussions.  Marlin & Associates worked with the Company’s management and its board to clarify detailed terms with both parties.  Within weeks of restarting discussions, Correlix entered into exclusive negotiations with TS-Associates, a leading supplier of precision instrumentation solutions for latency sensitive trading systems.

The acquisition benefits Correlix customers, as they can now expect continuity of service, a sustained road map for the product and the integration of TS-Associates' Application Tap, which enables software component instrumentation.

TS-Associates’ customers benefit from access to Correlix’s proven InfiniBand monitoring capability, a wider range of protocol decoders; a best in class development and quality assurance facility and a proven managed service delivery capability.

M&A Role

Marlin & Associates managed the process, assisted in the negotiations and acted as exclusive strategic and financial advisor to Correlix.

Press

TS-Associates acquires Correlix

July 30, 2012

TS-Associates, the leading supplier of precision instrumentation solutions for latency sensitive trading systems, has acquired the assets of Correlix, a latency management service provider. With this acquisition, TS-Associates now offers the most comprehensive range of instrumentation solutions for electronic trading systems, with best-of-breed latency monitoring and trade flow analysis capabilities, appealing to both technology and business users and with proven features at every layer in the technology stack.

The Correlix product becomes an additional offering under the TS-Associates Precision Instrumentation® brand, alongside TipOff® and Application Tap®. The availability of these products installed side-by-side on the same appliance with a unified user interface based on contemporary Web 2.0 technologies is also planned, leveraging TS-Associates’ “quantum leap” user interface framework.

The acquisition benefits Correlix customers directly as they can now expect continuity of service, a sustained road map for the product and the integration of TS-Associates' Application Tap, which enables software component instrumentation. The next product release will be Correlix 5.0, featuring support for nanosecond precision, decoder and user interface SDKs, and other significant product enhancements.

TS-Associates’ existing TipOff customers will benefit from Correlix’s proven InfiniBand monitoring capability, a wider range of protocol decoders, a best in class Quality Assurance facility and a proven managed service delivery capability.

As a result of the acquisition, TS-Associates adds data centre and enlarged office facilities in Wall Street, New York together with a development centre in Herzliya, Israel.

Henry Young, CEO of TS-Associates, says, “Following this acquisition we have all the technology assets required to offer a truly compelling range of Precision Instrumentation capabilities to the market. Correlix developed a competent, mature and powerful product. It is a good fit with TipOff in terms of both technology and commercial synergies.”

Shawn Melamed, CEO of Correlix, says, “I believe that the addition of Correlix to TS-A’s Precision Instrumentation product suite creates the most comprehensive offering available today in the latency monitoring space. I have always been impressed with TS-A’s technology. Therefore I am excited that our customers can benefit from a strong partner that will provide continuity of support and development in addition to integration with TS-A’s unique capabilities inherent in TipOff and Application Tap.” Shawn Melamed will act as a consultant to facilitate the smooth transition of existing Correlix customers over to TS-Associates.

Raymond Marra, COO Americas, says “During prior head-to-head evaluations, some customers would ideally have liked parts of TipOff and parts of Correlix. They no longer have to choose as a result of our product integration plan which will deliver seamless performance and operational benefits to both our existing and new customers.”

Marlin & Associates served as the exclusive strategic and financial advisor to Correlix.

Note to Editors

Founded in 2005 by Shawn Melamed, Correlix, headquartered in New York, was venture financed by Sequoia Capital, Genesis Partners, Blumberg Capital, Vernon & Park Capital and Xenia Ventures. The company's global client base encompasses the world's largest high frequency trading sell-side and buy-side institutions, market centers as well as low-latency service providers. Customers rely on Correlix to monitor, measure and minimize latency in trade execution and market data flows in real-time.

About TS-Associates

TS-Associates was founded in 1999 and is a leading supplier of precision instrumentation solutions for latency sensitive trading systems. With the TipOff network monitoring appliance and the Application Tap software instrumentation card, TS-Associates provides a complete range of precision instrumentation solutions capable of providing nanometric transparency into the latency dynamics of trading systems.

TS-Associates precision instrumentation solutions have been integrated with all leading transaction, market data, middleware and HFT systems. With deployments at leading financial institutions throughout North America, Europe and AsiaPac, TS-Associates offers a global support capability through its centres in London, New York, Tokyo and Singapore.

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