TP ICAP Confirms Definitive Terms for Liquidnet Acquisition

TP ICAP PLC (LON:TCAP) on Friday confirmed the agreement of definitive terms for the acquisition of the entire issued share capital of private trading operator Liquidnet Holdings and its subsidiaries.

This confirmation came over a week after the interdealer broker announced its interest in the dark pool operator’s business and entered into advanced talks.

The Most Diverse Audience to Date at FMLS 2020 – Where Finance Meets Innovation

Announced through the London Stock Exchange, the acquisition terms were agreed at a total consideration of between $575 million and $700 million, which include cash consideration of $525 million, non-contingent deferred consideration of $50 million, and contingent consideration of up to $125 million.

“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,” TP ICAP CEO, Nicolas Breteau said in a statement.

Mentioning the financing of the deal, TP ICAP detailed that it will raise $425 million with rights issues and source another $100 million the existing debt facilities. The rest $50 million will be paid at the completion of the third year of the deal.

Significant Share in the Buy-Side

Liquidnet has a major global buy-side network of over 1,000 institutional asset management clients and also integrates with all major order/execution management systems. The platform collectively manages $33 trillion in equity and fixed-income assets and has access to 45 global markets.

This, according to the announcement, will provide the potential new owner substantial electronic trading and workflow connectivity to the buy-side. Additionally, TP ICAP can diversify its asset exposure.

The confirmation of the deal is now pending with TP ICAP shareholders, and the board is further recommending a one-off 50 percent reduction of the minimum £94 million dividends for FY2020.

“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 buy-side-focused electronic networks,” Brian Conroy, CEO at Liquidnet, said.

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