LONDON: TP ICAP plc has agreed definitive terms to acquire the entire issued share capital of Liquidnet Holdings Inc. for a total consideration of between US$575 million and US$700 million, a news release said.
Total consideration comprises cash consideration of US$525 million payable on completion of the Acquisition, non-contingent deferred consideration of US$50 million and contingent consideration of up to US$125 million. The Acquisition is expected to complete in Q1 2021.
The Acquisition creates a UK-headquartered, global financial markets infrastructure provider. The Enlarged Group will be well-positioned to benefit from powerful market structure trends related to buyside objectives, such as achieving trade process efficiency and best execution, which are propelling the rapid electronification of financial market trading across multiple asset classes and, in particular, in the dealer-to-client (D2C) segments of the Credit and Rates markets.
Commenting on the Acquisition, Nicolas Breteau, CEO, TP ICAP, said: “Acquiring Liquidnet is a unique opportunity to transform TP ICAP’s growth prospects by materially accelerating the execution of our electronification, aggregation and diversification strategy.
“Liquidnet is a premier, technology-driven, global electronic trading network with more than 1,000 buyside clients1. It has a strong and trusted brand, which we will both retain and develop. We will continue to invest in, and grow, Liquidnet’s leading dark/block Equities business, and maintain its position as a trusted and unconflicted agency broker.
“Liquidnet’s electronic network incorporates extensive buyside trade workflow connectivity, including integrations with all major order management and execution management systems. We intend to build on Liquidnet’s capabilities and connectivity, and expand its offering, particularly in respect of D2C electronic trading in Credit and Rates. Further, we expect to leverage the data assets and analytics expertise of both organisations to drive non-transaction-related earnings.
“We believe that TP ICAP’s strong dealer relationships and product expertise are highly complementary to Liquidnet’s electronic capabilities and global buyside customer base. In addition, its global low-touch block cash Equities franchise complements our existing high-touch derivatives and cash Equities activities. Combined, TP ICAP and Liquidnet will be able to offer our clients compelling electronic trading and analytics solutions, driving sustained growth and shareholder value creation over the medium and long-term.”
Commenting on the Acquisition, Brian Conroy, CEO, Liquidnet, said: “We are energised by the opportunity of combining the strengths of TP ICAP and Liquidnet. This transaction underscores the relevance and future prospects of a business we started two decades ago, and which has grown to become not only a leader in global institutional equities block trading, but also one of the world’s premier buyside-focused electronic networks.
Together, we will be able to better serve our customers, whilst simultaneously delivering innovative market solutions to a broader range of institutions, across a wider range of asset classes and market segments. TP ICAP’s customer base, unique data assets and global leadership across a range of product markets are highly complementary to Liquidnet and are expected to enable the acceleration of our growth plans across Equities, Fixed Income and Investment Analytics.”
Liquidnet is a leading global electronic trading network that connects buyside clients to liquidity in the equity and fixed income markets through its electronic trading platform. The Acquisition creates a UK-headquartered, global financial markets infrastructure provider. The Enlarged Group will be well positioned to benefit from powerful market structure trends related to buyside objectives such as achieving trading efficiency and best execution, which are propelling the rapid electronification of financial market trading across asset classes, and in particular in the Credit and Rates segments.
The Board has approved the Acquisition and intends to recommend unanimously that TP ICAP shareholders vote in favour of the Resolution. The directors of TP ICAP who own shares have committed to vote in favour of the Resolution in respect of their own beneficial holdings and, in addition, the Executive Directors have agreed to take up their respective entitlements under the Rights Issue.
Additionally, having consulted several of our largest shareholders, owners of approximately 29% of the issued share capital are supportive of the Acquisition, and have indicated their current intention to vote in favour of the Resolution at the General Meeting.
TP ICAP brings together buyers and sellers in global financial, energy and commodities markets. It is one of the world’s largest wholesale market intermediaries, with a portfolio of businesses that provide broking services, data & analytics and market intelligence, trusted by clients around the world. It operates from offices in 26 countries, supporting award-winning brokers with market-leading technology.
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