Belzberg Technologies, as part of its upcoming merger, will shutter its U.S. brokerage subsidiaries, Electronic Brokerage Systems and R.C. Sheehan and Associates.
Most clients of the two firms will be referred to ConvergEx under an agreement between the Canadian technology vendor and ConvergEx.
Behind the demise of EBS and Sheehan is the takeover of Belzberg by Frontline, another provider of trading technology based in Canada. The deal follows a number of years of declining revenues and profits at Belzberg. The deal is expected to close in the second quarter.
The U.S brokerage units, which once provided the bulk of Belzberg’s revenues, suffered a crippling blow last year. In the first nine months, gross revenues declined by 75 percent in equities trading and nearly 40 percent in derivatives trading, compared to the same period in 2009.
For the nine month period last year, Belzberg took in about $9 million (Canadian) of its total $13 million in gross revenues from U.S. brokerage. That compares to about $25 million (Canadian) of a total $30 million in the same period during 2009. The balance in both years is largely attributable to software sales in Canada.
EBS, the larger of the two, was based in Chicago. Judith Robertson is CEO of Belzberg Technologies. EBS is co-run by Bob Sheehan in Chicago and by Andy Brenner in New York. Brenner is the former head of the ISE Stock Exchange.
Last spring, parent company Belzberg reported over 200 clients. ConvergEx could not confirm how many clients it was signing up. Belzberg reported that any transfer would be "seamless."
