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MarketAxess taps Treasury market with deal for LiquidityEdge
Posted on Wednesday, 14 August 2019 10:27
MarketAxess has agreed to acquire electronic US Treasuries marketplace LiquidityEdge for USD 150.00 million, giving the bond trading platform access to a USD 14,000 billion sector.
Under the terms of the transaction, the buyer will pay USD 100.00 million in cash and USD 50.00 million-worth of its common stock traded on Nasdaq, subject to customary purchase price adjustments.
The Financial Times picked up on the announcement and noted Treasuries are the foundation of the bond trading sector with high-speed dealers such as CME Group and Tradeweb Markets operating alongside investment banks that have dominated the market for a long time.
According to the paper, the majority of transactions are executed on venues run by these two businesses and Bloomberg.
LiquidityEdge was founded in 2015 by broker David Rutter and offers a bespoke trading ecosystem to connect dealers, market-makers and investors to trade in the USD 500.00 billion average daily volume US Treasury industry, where the Wall Street Journal reported it controls about 5.0 per cent of total trading.
The deal creates a compelling combination for global fixed income market participants as MarketAxess has a trading network of over 1,600 institutional depositors.
Nichola Hunter, chief executive of the target, said: “Across a few short years, LiquidityEdge has grown to become one of the leading marketplaces to trade US Treasuries.
“Offering an alternative to incumbent trading protocols, LiquidityEdge continues to record daily highs in excess of USD 25.00 billion. That tremendous growth is made possible by our cutting-edge approach to liquidity management and superior technology solutions, something also shared by MarketAxess.”
The buyer’s president Chris Concannon noted that as a result of the deal, the group will gain rates trading capabilities, complementing the existing leading position of electronic trading in the global credit market.
Completion is slated for the fourth quarter of 2019, following the receipt of regulatory approvals.
Tradeweb made its stock market debut earlier this year in one of the largest initial public offerings to complete in 2019 to date, according to Zephyr, the M&A database published by Bureau van Dijk.
It raised USD 1.08 billion on Nasdaq in April.
© Zephus Ltd