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Virtu to raise USD 750mn
Posted on Friday, 21 April 2017 11:05
High-frequency electronic trading firm and market maker Virtu Financial has announced one of the largest capital increases by a US company of 2017 to date to finance the acquisition of KCG Holdings for USD 1.40 billion.
The New York-based two-sided quotations provider has already roped in backers for its proposed USD 750.00 million stock offering priced at a market discount of USD 15.60 apiece.
North Island, which is managed by former Nasdaq chief executive Robert Greifeld and Glenn Hutchins, the cofounder of private equity giant Silver Lake, has stepped up to the plate to take a slice of the enlarged trading firm.
It is buying USD 625.00 million-worth of stock in partnership with Singaporean sovereign wealth fund GIC and Canadian pension investment manager Public Sector Pension Investment Board.
Temasek, an existing Virtu shareholder, has also committed to investing an additional USD 125.00 million in the offering, which Zephyr, the M&A database published by Bureau van Dijk, shows is the 10th largest by a US company in 2017 to date.
As a technology-enabled market maker and liquidity provider, the company generates revenue by buying and selling a broad range of securities and other financial instruments and earns small bid/ask spreads across a large volume of transaction.
It provides quotations in more than 12,000 securities and other financial instruments on more than 235 unique exchanges, markets and liquidity pools in 36 countries around the world.
Competitors include Citadel Securities, DRW Holdings, Hudson River Trading, IMC, KCG, Optiver, Susquehanna, and Wolverine Trading.
Virtu posted net profit of USD 158.80 million for the 12 months ended 31st December 2016, and normalised adjusted net profit of USD 135.80 million, showing earnings per share of USD 0.88 and USD 0.97, respectively.
Total revenues amounted to USD 702.30 million and adjusted net trading profit to USD 414.10 million in FY 2016 and as at the end of the year it had USD 181.40 million in cash and equivalents.
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