MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading
electronic trading platform for fixed-income securities, and the
provider of market data and post-trade services for the global
fixed-income markets, has entered into an agreement to acquire
LiquidityEdge, a leading provider of an electronic U.S. Treasuries
marketplace. The acquisition is valued at $150 million, including
$100 million in cash and $50 million in MKTX stock, subject to
customary purchase price adjustments.
Established in 2015, LiquidityEdge offers a
bespoke trading ecosystem to connect a community of dealers,
market-makers and institutional investors to trade in the $500
billion average-daily-volume U.S. Treasury market. LiquidityEdge’s
innovative custom liquidity pools, as well as direct dealer
streaming capabilities, for on- and off-the-run U.S. Treasuries has
been quickly adopted by a diverse client base. In conjunction with
MarketAxess’ global trading network of over 1,600 institutional
participants, this acquisition creates a compelling combination for
global fixed income market participants.
Chris Concannon, President and Chief Operating
Officer of MarketAxess, commented, “Through the acquisition of
LiquidityEdge, we are bringing rates trading capabilities to
MarketAxess to complement our leading position of electronic
trading in the global credit markets. This will not only enhance
the trading experience for our dealer and institutional investor
clients, but also offer a truly innovative solution for dealers to
stream U.S. Treasury quotes to a tailored audience.”
Nichola Hunter, Chief Executive Officer of
LiquidityEdge, added, “Across a few short years, LiquidityEdge has
grown to become one of the leading marketplaces to trade U.S.
Treasuries. Offering an alternative to incumbent trading protocols,
LiquidityEdge continues to record daily highs in excess of $25
billion. That tremendous growth is made possible by our
cutting-edge approach to liquidity management and superior
technology solutions, something also shared by MarketAxess.
MarketAxess has been a true pioneer in driving the evolution of the
fixed income markets, and we’re thrilled that LiquidityEdge will
add to that story.”
MarketAxess also announces the expansion of
hedging capabilities to include Treasury hedging for MarketAxess’
credit products, utilizing LiquidityEdge’s technology
infrastructure and robust liquidity network. Currently in
development and targeted to launch the initial phase in the fourth
quarter of 2019, this new functionality will enhance a client’s
ability to simultaneously hedge a credit spread transaction within
the same workflow, maximizing efficiency and reducing rate movement
risk. The partnership with LiquidityEdge will add Treasury net
hedging capabilities for aggregated sets of corporate bond
trades.
The transaction is expected to close in the
fourth quarter of 2019, subject to the satisfaction of customary
closing conditions, including the receipt of required regulatory
approvals.
Rick McVey, Chairman and Chief Executive
Officer, Chris Concannon, President and Chief Operating Officer and
Tony DeLise, Chief Financial Officer, will host a conference call
today at 4:30pm EST with investor analysts to discuss the
acquisition. To access the conference call, please dial
855-425-4206 (U.S.) or 484-756-4249 (international). The Company
will also host a live audio Webcast of the conference call on the
Investor Relations section of the Company's website at
http://investor.marketaxess.com. A replay of the call will be made
available by dialing 855-859-2056 (U.S.) or 404-537-3406
(international) for one week after the announcement. The passcode
for replay callers is 9197269. The Webcast will also be archived on
http://investor.marketaxess.com for 90 days following the
announcement.
About MarketAxessMarketAxess
operates a leading, institutional electronic trading platform
delivering expanded liquidity opportunities, improved execution
quality and significant cost savings across global fixed-income
markets. A record $1.7 trillion of U.S. investment-grade bonds,
U.S. high yield bonds, emerging market debt, Eurobonds and other
fixed income securities traded through MarketAxess’ patented
trading technology in 2018. The global community of 1,600
firms trading on MarketAxess today include the world’s leading
asset managers and institutional broker-dealers. MarketAxess’
award-winning Open Trading™ marketplace is regarded as the
preferred all-to-all trading solution in the global credit markets,
creating a unique liquidity pool for a broad range of credit market
participants. Drawing on its deep data and analytical resources,
MarketAxess enables automated trading solutions and, through its
Trax® division, provides a range of pre- and post-trade services
and products.
MarketAxess is headquartered in New York and has
offices in London, Amsterdam, Boston, Chicago, Los Angeles, Miami,
Salt Lake City, San Francisco, São Paulo, Hong Kong and Singapore.
For more information, please visit www.marketaxess.com.
About
LiquidityEdgeLiquidityEdge offers an alternative trading
model for the U.S. Treasury market with a choice of
relationship-based execution models that deliver direct and order
book trading access to a broad range of market participants.
Founded in 2015 by David E. Rutter,
LiquidityEdge is an SEC registered broker-dealer and member of
FINRA. Clients can choose between one-to-one or many-to-many
trading models, facilitating a combination of anonymous and
disclosed streaming of executable prices, creating a personalized
order book for each participant.
LiquidityEdge is headquartered in New York and
has an office in London. For more information, please visit:
www.liquidityedge.trade
Cautionary Note Regarding
Forward-Looking StatementsThis press release may contain
forward-looking statements, including statements about the outlook
and prospects for Company and industry growth, as well as
statements about the Company’s future financial and operating
performance. These and other statements that relate to future
results and events are based on MarketAxess’ current expectations.
The Company’s actual results in future periods may differ
materially from those currently expected or desired because of a
number of risks and uncertainties, including: global economic,
political and market factors; the volatility of financial services
markets generally; the level of trading volume transacted on the
MarketAxess platform; the absolute level and direction of interest
rates and the corresponding volatility in the corporate
fixed-income market; the level and intensity of competition in the
fixed-income electronic trading industry and the pricing pressures
that may result; the variability of our growth rate; the rapidly
evolving nature of the electronic financial services industry; our
ability to introduce new fee plans and our clients’ response; our
exposure to risks resulting from non-performance by counterparties
to transactions executed between our clients in which we act as an
intermediary in matched principal trades; our dependence on our
broker-dealer clients; the loss of any of our significant
institutional investor clients; our ability to develop new products
and offerings and the market’s acceptance of those products; the
effect of rapid market or technological changes on us and the users
of our technology; our ability to successfully maintain the
integrity of our trading platform and our response to system
failures, capacity constraints and business interruptions; our
vulnerability to cyber security risks; our ability to protect our
intellectual property rights or technology and defend against
intellectual property infringement or other claims; our ability to
enter into strategic alliances and to acquire other businesses and
successfully integrate them with our business; our ability to
comply with new and existing laws, rules and regulations both
domestically and internationally; our ability to maintain effective
compliance and risk management methods; the strain of growth
initiatives on management and other resources; our future capital
needs and our ability to obtain capital when needed; limitations on
our operating flexibility contained in our credit agreement; and
other factors. The Company undertakes no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise. More information about these and other
factors affecting MarketAxess’ business and prospects is contained
in MarketAxess’ periodic filings with the Securities and Exchange
Commission and can be accessed at www.marketaxess.com.
MarketAxess Media Relations
Contacts:Kyle WhiteMarketAxess Holdings Inc.+1 212 813
6355kwhite@marketaxess.com
Bill McBrideRF | Binder +1 917 239
6726MarketAxessPR@rfbinder.com
Investor Relations
Contact:David CresciMarketAxess Holdings Inc.+1 212 813
6027dcresci@marketaxess.com
LiquidityEdge Media Relations
Contact:Chatsworth Communications+44 (0)20 7440
9780contact@chatsworthcommunications.com
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