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(Alliance News) - Interdealer broker TP ICAP PLC on Friday confirmed that it will acquire New York-based electronic trading network Liquidnet Holdings Inc for a price ranging from USD575 million to USD700 million.
Liquidnet is said to be a specialist in equities dark trading, with a growing presence in fixed income. For the year to the end of June, Liquidnet generated adjusted earnings before interest, tax, depreciation and amortisation of USD64 million, on revenue of USD339 million.
The payment comprises an upfront consideration of USD525 million on the completion of the deal, and a deferred consideration of USD50 million. TC ICAP will pay up to a further USD125 million depending on the performance of the Liquidnet Equities business over the three-year period from the start of 2021.
TP ICAP expects to pay USD100 million in cash funded from its existing debt facilities on the completion of the deal, and then USD425 million in cash, raised through a rights issue, which will be fully underwritten by HSBC Bank PLC.
The remaining USD50 million would be funded from senior secured loan notes issued on completion to certain Liquidnet stockholders.
TP ICAP expects to complete the deal in the first quarter of 2021.
"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 clients. 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," said Chief Executive Officer Nicolas Breteau.
Shares in TP ICAP were down 2.3% at 227.56 pence on Friday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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