After revamping the paper-intensive loan syndication market with a browser-based documentation distribution service, the founders of IntraLinks are eyeing the way other big multi-party deals are put together.
In 1996, 25-year J.P. Morgan veteran Arthur Scully, 20-year investment banker Mark Adams, and 12-year trading advisor and hedge fund manager John Muldoon developed an online loan syndication application called IntraLoan, based on Lotus' Domino collaboration software. Several big name banks signed up for the fee-based service including Bank of America and Chase Manhattan Bank. IntraLinks executive vice president Rob Garrigan says IntraLinks handles somewhere between 30 and 40 percent of the U.S. loan syndication market. "We've become the industry standard in loan syndication over the Internet," he says.
ScotiaBank has been using IntraLoan for the past six months to reduce costs associated with traditional multi-party communications including faxes, Fedex and phone calls. "The quality of the material users can print from the Web is better than faxes," says ScotiaBank head of loan sales Robert Mustard, "and we can work on changed pages up until the last minute instead of having someone re-send faxes to dozens of people at three in the morning."
Following IntraLoan's success, IntraLinks rolled out its DealSpace service in January to provide online document distribution and collaboration services for other capital markets transactions such as private placements, asset-backed securities and municipal financing.
To date, IntraLinks has helped clients put together more than 990 transactions valued at over $500 billion. With so much riding on IntraLinks' services, security was mission-critical. Rather than go it alone, the company opted to outsource its Web hosting to IBM.
"Anytime anyone asks us about security, we enjoy answering that question because IBM has the resiliency, redundancy and scalability our clients demand and deserve," says Garrigan.
Today, the Intralinks applications are hosted by IBM's Global Network and run on a Lotus Domino server, acting as the document repository. Because of this outsourcing arrangement, and the ability for multiple parties to work on documents simultaneously, Intralinks considers itself a collaborative application service provider (ASP)-a company that offers customer access to rented software via the Web. Participants-including lawyers, accountants, issuers, investment banks and institutional investors-collaborate online, share documents and post changes over the Web without having to install any software. Instead, they pay a fee for Intralinks' services.
Analysts say IntraLinks currently has no significant competition in its niche, and that its growth prospects are good provided the deal syndication market continues to grow and the company continues to move into new businesses that re-leverage its core technology