U.S. private equity firm Warburg Pincus has agreed to acquire ITG Investment Research, the Calgary-based energy financial research group of ITG (NYSE: ITG). Under the terms of the agreement, Warburg Pincus will pay US$120.5 million in cash. It plans to invest in the energy research group to enhance its product offering and service capabilities, and to continue its growth for institutional and oil and gas clients. The deal is expected to close by the end of the year.
ITG Agrees to Sell Calgary-based Research Unit
NEW YORK, Nov. 05, 2015 (GLOBE NEWSWIRE) — ITG (NYSE:ITG), a leading independent broker and financial technology provider, today announced that it has signed a definitive agreement to sell the Calgary-based unit of ITG Investment Research (the “energy research group”) to Warburg Pincus, a global private equity firm focused on growth investing. Subject to customary conditions, the transaction is expected to close by the end of 2015.
Upon close, the energy research group will launch under a new brand name.
Under the terms of the agreement, Warburg Pincus will acquire the energy research group for $120.5 million in cash. ITG expects to book a gain of between $90 million and $95 million after taxes from this transaction. The transaction is expected to increase ITG’s tangible book value by between $2.85 and $3.00 per share.
The energy research group has a dedicated team of geological and petroleum engineers and financial analysts covering more than 150 companies operating in every key North American and many international energy plays. The transaction will include all of the 44 Calgary-based employees as well as the associated oil and gas sales team.
Warburg Pincus intends to invest in the business moving forward, partnering with the company to enhance its product offering and client service and to continue to grow the investment research business for its institutional and oil and gas client base. As part of this transaction, ITG will continue to provide the energy research to its institutional clients, serving as the exclusive sales partner for institutional investors. The transaction does not involve ITG’s non-energy investment research offerings.
Commenting on the transaction, ITG Chief Financial Officer Steve Vigliotti said, “We are pleased with the value we have been able to create for shareholders from the growth in energy research since we acquired the business in 2011. We look forward to partnering with Warburg Pincus and the energy research team to continue providing their exceptional research product to our clients.”
Cary J. Davis, Managing Director, Technology, Media and Telecommunications, Warburg Pincus, stated, “We look forward to partnering with management in this next chapter for the business. We are excited about building on the energy research team’s success with its differentiated product offerings and utilizing our information services experience to accelerate its growth plans, to the benefit of its institutional and oil and gas clients.”
ITG is currently evaluating alternatives for the use of the proceeds from this transaction, including strategic initiatives and share repurchases.
“ITG is not standing still,” said ITG interim Chief Executive Officer Jarrett Lilien. “We are managing our capital in a manner that is best for our business and our shareholders.”
ITG was represented by Wachtell, Lipton, Rosen & Katz, and Warburg Pincus was represented by Kirkland & Ellis LLP.
ITG is an independent broker and financial technology provider that partners with global portfolio managers and traders to provide unique data-driven insights throughout the investment process. From investment decision through settlement, ITG helps clients understand market trends, improve performance, mitigate risk and navigate increasingly complex markets. ITG is headquartered in New York with offices in North America, Europe, and Asia Pacific. For more information, please visit www.itg.com.
About Warburg Pincus
Warburg Pincus LLC is a leading global private equity firm focused on growth investing. The firm has more than $35 billion in assets under management. The firm’s active portfolio of more than 120 companies is highly diversified by stage, sector and geography. Warburg Pincus is an experienced partner to management teams seeking to build durable companies with sustainable value.
Founded in 1966, Warburg Pincus has raised 14 private equity funds, which have invested more than $50 billion in over 720 companies in more than 35 countries. Investments in information services companies have included CAMP Systems, The Gordian Group, Interactive Data Corporation, iParadigms and Payscale. The firm is headquartered in New York with offices in Amsterdam, Beijing, Hong Kong, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo and Shanghai. For more information please visit www.warburgpincus.com.
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