KCG ANNOUNCES SALE
OF KCG HOTSPOT TO BATS GLOBAL MARKETS
Transaction is expected to increase KCG's tangible book
value by approximately $2.00 per share
JERSEY CITY, New Jersey - January
28, 2015 - KCG Holdings, Inc. (NYSE: KCG) today announced it
has entered into a definitive agreement to sell KCG's spot FX
trading venue, KCG Hotspot, to BATS Global Markets. The
transaction is expected to be completed in the second quarter of
2015.
Under the terms of the agreement, KCG will receive
$365 million in cash upon the close of the transaction. In
addition, the parties have agreed to share certain tax benefits,
which could result in further payments to KCG of up to
approximately $70 million in the three-year period following the
close. Upon the close, the transaction is expected to
increase KCG's tangible book value by approximately $2.00 per
share.
Daniel Coleman, Chief Executive Officer of KCG,
remarked, "The sale of Hotspot is expected to realize significant
value for KCG's shareholders while simultaneously allowing us to
continue to focus on the expansion of our global FX client market
making business. Upon completion of the deal, our focus will be on
putting the cash to good use for KCG and our shareholders."
Joe Ratterman, Chief Executive Officer of BATS,
said "Hotspot is an innovative foreign exchange leader which will
become an important part of our expanding global footprint, and we
are excited to welcome their highly-regarded team to BATS Global
Markets. Their FX expertise and reputation, along with our
technology excellence and global presence, will make for a powerful
combination and enable us to have a meaningful and significant
impact on the direction of the FX market in the years to come."
Coleman continued, "After conducting a thorough
and competitive process, it became clear that BATS is the right
strategic partner for Hotspot, as well as its clients and
employees. BATS and Hotspot share a commitment to technological
excellence. This, coupled with the experience, resources and
insights derived from operating global multi-asset class markets,
ensures that BATS is well positioned to further accelerate
Hotspot's growth."
Hotspot caters to a broad group of trading
participants, providing institutions, dealers and retail broker
clients with spot foreign exchange executions through an advanced,
fully electronic platform.
KCG was advised on the transaction by Jefferies LLC and Sullivan
& Cromwell LLP.
About KCG
KCG is a leading independent securities firm offering investors and
clients a range of services designed to address trading needs
across asset classes, product types and time zones. The firm
combines advanced technology with exceptional client service across
market making, agency execution and venues. KCG has multiple access
points to trade global equities, fixed income, currencies and
commodities via voice or automated execution. www.kcg.com
Certain statements contained
herein may constitute "forward-looking statements" within the
meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are typically identified by words such as "believe,"
"expect," "anticipate," "intend," "target," "estimate," "continue,"
"positions," "prospects" or "potential," by future conditional
verbs such as "will," "would," "should," "could" or "may," or by
variations of such words or by similar expressions. 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 strategic business combination (the "Mergers") of Knight
Capital Group, Inc. ("Knight") and GETCO Holding Company, LLC
("GETCO"), including, among other things, (a) difficulties and
delays in integrating the Knight and GETCO businesses or fully
realizing cost savings and other benefits, (b) the inability to
sustain revenue and earnings growth, and (c) customer and client
reactions to the Mergers; (ii) the August 1, 2012 technology issue
that resulted in Knight's broker-dealer subsidiary sending numerous
erroneous orders in NYSE-listed and NYSE Arca securities into the
market and the impact to Knight's business as well as actions taken
in response thereto and consequences thereof; (iii) the sale of
KCG's reverse mortgage origination and securitization business,
sale of KCG's futures commission merchant and the agreement to sell
KCG Hotspot; (iv) changes in market structure, legislative,
regulatory or financial reporting rules, including the increased
focus by regulators, the New York Attorney General, Congress 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; (v) past or future changes to
organizational structure and management; (vi) 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; (vii) KCG's ability to keep up with
technological changes; (viii) KCG's ability to effectively identify
and manage market risk, operational and technology risk, legal
risk, liquidity risk, reputational risk, counterparty and credit
risk, international risk, regulatory risk, and compliance risk;
(ix) the cost and other effects of material contingencies,
including litigation contingencies, and any adverse judicial,
administrative or arbitral rulings or proceedings; and (x) the
effects of increased competition and KCG's ability to maintain and
expand market share. The list above is not exhaustive. Readers
should carefully review the risks and uncertainties disclosed in
KCG's reports with the SEC, including, without limitation, those
detailed under "Risk Factors" in KCG's Annual Report on Form 10-K
for the year-ended December 31, 2013, under "Certain Factors
Affecting Results of Operations" in KCG's Quarterly Report on Form
10-Q for the period ended September 30, 2014 and other reports or
documents KCG files with, or furnishes to, the SEC from time to
time.
CONTACTS
Sophie
Sohn |
Jonathan
Mairs |
Communications & Marketing |
Investor
Relations |
312-931-2299 |
201-356-1529 |
media@kcg.com |
jmairs@kcg.com |
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: KCG Holdings, Inc. via Globenewswire
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