BGC, GFI to Offload Trayport to ICE for $650 Million
The move is the latest in a strategy to unlock newly-acquired assets' value.
A move of this nature was seen as all but assured when BGC, part of Cantor Fitzgerald, finally won out in its quest to buy GFI after a yearslong courtship that ended this February.
"While in many ways we would have benefited from continuing to own Trayport, the proposed transaction is the most direct way for us to unlock value for our shareholders," Howard Lutnick, BGC Partners chairman, said in a statement. "Indeed, one of the main reasons that BGC pursued GFI was the expectation that the sale of Trayport would dramatically lower the price and risk involved with respect to purchasing the rest of GFI's businesses."
Lutnick further explained that the proposed sale price represents $650 million of the $750 million that BGC will pay for all of GFI.
"This translates into BGC paying approximately $100 million for $640 million of GFI's remaining revenues, or a multiple of just 0.16 times sales. Therefore, we expect the GFI transaction to produce enormous value for BGC's investors," Lutnick said.
Acquisitions Aplenty
The deal is set to close as early as the first quarter of 2016, and BGC says it intends to use the monies from the deal to invest in its real estate unit, Newmark Grubb Knight Frank, as well as its remaining FENICS electronic FX trading platform.
With both Trayport and US treasuries platform eSpeed sold to major exchange operators in recent years, much of BGC's most valuable technology assets — either historical or newly-acquired — will now be distributed around the Street.
Meanwhile, the move comes at an acquisitive moment for ICE as well, which just bought Interactive Data Corporation (IDC) for $5.2 billion.
With an established foothold in the commodities market, ICE was one of the likeliest landing places for Trayport; however its future plans for the platform remain unclear. BGC and GFI intend to remain Trayport clients.
Cantor and Goldman Sachs served as financial advisors to BGC and ICE, respectively. Wachtell, Lipton, Rosen & Katz and Shearman & Sterling LLP served as legal advisors.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
People Moves: NorQuant, Tradition, Duco, HKEx, SimCorp, Hazeltree, Xceptor, Broadridge, and more
A look at the past month’s people moves in the capital markets technology and data space.
Bank-led consortium takes aim at position reporting
Five banks, including Barclays, BNP Paribas, Goldman Sachs and HSBC, have joined forces to mitigate interpretation and implementation errors in position reporting disclosures.
This Week: BBH, AllianceBernstein add data solutions, Deutsche Börse-Nodal Exchange, and more
A summary of some of the latest financial technology news.
Consortium backs BGC’s effort to challenge CME
Banks and market makers—including BofA, Citi, Goldman, Jump and Tower—will have a 26% stake in FMX.
Symphony boosts Cloud9 voice offerings with AI
The messaging and collaboration platform builds on Cloud9’s capabilities as it embraces the AI wave in what CEO Brad Levy calls “incremental” steps.
Can exchanges leverage new tech to claw back ETF share from RFQ platforms?
Systematic trading strategies and proliferating data are bringing efficiency to an otherwise-fragmented European ETF market.
Nasdaq reshuffles tech divisions post-Adenza
Adenza is now fully integrated into the exchange operator’s ecosystem, bringing opportunities for new business and a fresh perspective on how fintech fits into its strategy.
Liquidnet sees electronic future for gray bond trading
TP Icap’s gray market bond trading unit has more than doubled transactions in the first quarter of 2024.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- DTCC urges affirmation focus ahead of T+1 move
- FactSet looks to build on portfolio commentary with AI