LONDON, UK: London Stock Exchange Group (LSEG) has agreed to acquire Quantile Group Limited. LSEG has agreed to pay a maximum aggregate consideration of up to £274 million (subject to customary adjustments) to Quantile’s shareholders.

Quantile is a leading provider of portfolio, margin and capital optimisation and compression services for the global financial services market.

Quantile’s powerful optimisation engine provides advanced trade compression and risk rebalancing services to banks, hedge funds and other financial institutions trading OTC derivatives. Quantile was founded in 2015 and is led by a team of industry experts with significant experience in risk management, quantitative analysis and trading technology.

The transaction will enable LSEG to expand its range of Post Trade risk management solutions to its customers through trade compression, capital and margin optimisation services.

Quantile will be complementary to LSEG’s global OTC Derivatives clearing services, which provide risk management and capital efficiencies to customers. The transaction furthers LSEG’s strategy of providing customers with a global, multi-asset class financial markets infrastructure operating across the trading ecosystem.

London Stock Ex and Quantile’s services will be available on an Open Access basis that will continue to offer customers the choice of where to clear, compress and optimise their trading activity. Following the Transaction, Quantile will remain a standalone entity within LSEG’s Post Trade division, reporting to Daniel Maguire, LSEG’s Group Head of Post Trade.

Daniel Maguire, Group Head, Post Trade, LSEG & CEO, LCH Group, said: “The acquisition of Quantile builds on the strong growth delivered by LSEG and our Post Trade division. It significantly enhances LSEG’s multi-asset class customer offering across the transaction lifecycle by providing more sophisticated tools and infrastructure for customers to optimise their financial resources and drive greater operational efficiencies in OTC derivatives. I look forward to working with Andy and his team at Quantile to further support innovation for the market and develop our businesses.”

Andrew Williams, CEO, Quantile, said: “I am delighted with this agreement to become part of LSEG. Quantile and LSEG share many of the same values, including a culture of innovation and a focus on delivering market leading services. I look forward to working with Daniel and the team to accelerate our growth and to continue to deliver efficiencies and portfolio optimisation for our customers and the wider OTC derivatives marketplace.”

Stephen O’Connor is Chairman and a minority shareholder in Quantile. Until recently, Stephen was a Senior Independent Director of LSEG. He stepped down from the LSEG Board on 6 August 2021, but remains a director of LSEG’s subsidiary, London Stock Exchange plc.

As the transaction is classified as a smaller related party transaction under LR 11.1.10, a sponsor’s written confirmation has been obtained stating that the Transaction is fair and reasonable as far as the Company’s shareholders are concerned.

The acquisition is being funded from existing cash resources and credit facilities and is expected to close in 2022, subject to antitrust and other regulatory approvals.

Evercore is acting as sole financial adviser and sponsor to LSEG in relation to the transaction.