BGC, GFI to Offload Trayport to ICE for $650 Million

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.