KCG Holdings Inc said July 27 that it agreed to buy Neonet Securities AB. Hay Tor Capital, KAS BANK and Cidron Delfi Intressenter Holding are the sellers. Financial terms weren’t disclosed. Stockholm-based Neonet is an agency broker and execution specialist. KCG was advised on the transaction by Advokatfirman Vinge KB and Sullivan & Cromwell LLP. NovitasFTCL acted as financial advisor while Advokatfirman Delphi the legal advisor to the shareholders of Neonet.
JERSEY CITY, N.J., July 27, 2016 /PRNewswire/ — KCG Holdings, Inc. (NYSE: KCG) (“KCG”) today announced that it has entered into a definitive agreement to acquire Neonet Securities AB (“Neonet”), an independent agency broker and execution specialist based in Stockholm, Sweden from its shareholders, Hay Tor Capital, KAS BANK and Cidron Delfi Intressenter Holding. Financial terms were not disclosed.
Founded in 1996, Neonet provides a comprehensive suite of advanced algorithmic trading, smart order routing and sales trading primarily in European equities across 30 public and private markets to approximately 200 clients in more than 20 countries. Neonet strives to deliver transparent execution services to banks, brokers and financial institutions with an optimized balance of quality and cost. The acquisition will strengthen KCG’s reach in continental Europe and will enable both KCG’s and Neonet’s clients to access a more complete range of international execution services and capabilities.
Philip Allison, Chief Executive Officer of KCG Europe Limited, said, “We are pleased to announce an agreement to acquire Neonet, a Nordic pioneer in trading and execution services, as we broaden our European reach and continue to bolster our ability to provide clients with global execution solutions. Neonet’s sophisticated technology, experienced trading desks, and deep team of execution specialists are highly complementary to our existing execution services and will help accelerate the growth of our agency client business.”
John Ashdown, Managing Partner at Hay Tor Capital, said, “We are delighted that such a major industry participant as KCG will now take the Neonet business forward to the next level at an immensely exciting time of industry transformation in Europe.”
Tim Wildenberg, Chief Executive Officer of Neonet, added, “We are excited to join forces with KCG, an established market leader in global execution services. For the last 20 years, Neonet has focused on putting clients first and providing them with transparent execution services, as well as deep knowledge of international financial markets. We look forward to leveraging KCG’s significant expertise across asset classes in the U.S. and Europe for the benefit of our clients worldwide for years to come.”
The transaction, which is subject to customary regulatory and other approvals, is expected to close later this year. Neonet will continue to be led by Mr. Wildenberg and will maintain the company’s headquarters in Stockholm following the close. The transaction is expected to result in cost savings through consolidating exchange memberships, market data, routing and other operational costs while simultaneously expanding KCG’s breadth and commitment to Europe. KCG expects the acquisition will be slightly accretive to earnings in 2017.
KCG was advised on the transaction by Advokatfirman Vinge KB and Sullivan & Cromwell LLP. NovitasFTCL and Advokatfirman Delphi served as financial and legal advisors, respectively, to the shareholders of Neonet.
KCG is a leading independent securities firm offering investors a range of services designed to address trading needs across asset classes, product types and time zones. The firm combines advanced technology with specialized client service across market making, agency execution and venues and also engages in principal trading via exchange-based market making. KCG has multiple access points to trade global equities, fixed income, options, currencies and commodities via voice or automated execution. www.kcg.com
Neonet is an execution service provider that offers independent, flexible and transparent execution services, which significantly reduce the cost of trading for users. Neonet serves clients in over 20 countries, and all trades are executed on regulated markets. The company was earlier listed but is currently privately owned by a consortium of owners including Hay Tor Capital LLP, KAS Bank N.V., and Nordic Capital / Cidron Delphi Intressenter AB.
For more information visit www.neonet.com
Certain statements contained herein and the documents incorporated by reference containing the words “believes,” “intends,” “expects,” “anticipates,” and words of similar meaning, may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These “forward-looking statements” are not historical facts and are based on current expectations, estimates and projections about KCG’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Any forward-looking statement contained herein speaks only as of the date on which it is made. Accordingly, readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict including, without limitation, risks associated with: (i) the inability to manage trading strategy performance and sustain revenue and earnings growth; (ii) the receipt of additional payments from the sale of KCG Hotspot that are subject to certain contingencies; (iii) changes in market structure, legislative, regulatory or financial reporting rules, including the increased focus by Congress, federal and state regulators, the SROs and the media on market structure issues, and in particular, the scrutiny of high frequency trading, alternative trading systems, market fragmentation, colocation, access to market data feeds, and remuneration arrangements such as payment for order flow and exchange fee structures; (iv) past or future changes to KCG’s organizational structure and management; (v) KCG’s ability to develop competitive new products and services in a timely manner and the acceptance of such products and services by KCG’s customers and potential customers; (vi) KCG’s ability to keep up with technological changes; (vii) KCG’s ability to effectively identify and manage market risk, operational and technology risk, cybersecurity risk, legal risk, liquidity risk, reputational risk, counterparty and credit risk, international risk, regulatory risk, and compliance risk; (viii) the cost and other effects of material contingencies, including litigation contingencies, and any adverse judicial, administrative or arbitral rulings or proceedings; (ix) the effects of increased competition and KCG’s ability to maintain and expand market share; (x) the announced plan to relocate KCG’s global headquarters from Jersey City, NJ to New York, NY; and (xi) KCG’s ability to complete the sale or disposition of any or all of the assets or businesses that are classified as held for sale. The list above is not exhaustive. Because forward looking statements involve risks and uncertainties, the actual results and performance of KCG may materially differ from the results expressed or implied by such statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, KCG also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made herein. Readers should carefully review the risks and uncertainties disclosed in KCG’s reports with the U.S. Securities and Exchange Commission (“SEC”), including those detailed in “Risk Factors” in Part I, Item 1A of KCG’s Annual Report on Form10-K for the year ended December 31, 2015, “Legal Proceedings” in Part I, Item 3, under “Certain Factors Affecting Results of Operations” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7, in “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A, and in other reports or documents KCG files with, or furnishes to, the SEC from time to time. This information should be read in conjunction with KCG’s Consolidated Financial Statements and the Notes thereto contained in its Annual Report on Form 10-K, Quarterly Report on Form 10-Q for the quarter-ended March 31, 2016, and in other reports or documents KCG files with, or furnishes to, the SEC from time to time.