State Street to Acquire Currenex: Acquisition Will Accelerate State Street's Participation in Fast Growing Electronic Foreign Ex
January 22 2007 - 7:30AM
Business Wire
State Street Corporation (NYSE: STT), the world�s leading provider
of financial services to institutional investors, announced today
that it has agreed to acquire Currenex, an independently owned
online foreign exchange trading platform. Currenex is a market
leader in the active-trading segment of the foreign exchange
market, serving banks, corporations, hedge funds and other active
trading firms. The acquisition will accelerate State Street�s
participation in the fast growing electronic foreign exchange
trading marketplace. Under the terms of the agreement, State Street
will acquire Currenex for approximately $564 million, which will be
paid in cash. State Street expects the transaction to be neutral to
2007 results and slightly accretive to earnings in 2008. �Today�s
announcement reflects our proven strategy of acquiring key
technologies and platforms that enhance capabilities for our
customers and expand our market share in high growth areas such as
foreign exchange. This acquisition also diversifies State Street�s
trading customer base beyond traditional asset managers to include
more active currency managers and hedge funds,� said Joseph L.
Hooley, vice chairman and global head of investment servicing and
investment research and trading at State Street. �The future of
global electronic foreign exchange trading will be determined by
who can provide the most efficient technology solutions that allow
quicker access to markets and flexible, comprehensive trading
solutions.� Foreign exchange is the largest and most-liquid market
in the world with trading volumes of approximately $2.3 trillion
per day. According to a study by ClientKnowledge, volumes are
projected to grow to above $3 trillion per day by 2010 and
electronic foreign exchange trading is also projected to double in
volume over this period to more than $2 trillion per day. State
Street�s FX Connect is the leading institutional electronic foreign
exchange trading platform. In December 2006, FX Connect exceeded
$108 billion in a single day�s trading volume. �Being able to offer
our customers innovative trading tools through FX Connect and
Currenex fulfills our goal of delivering leading-edge foreign
exchange capabilities to meet growing market demand,� said Stanley
W. Shelton, executive vice president and head of State Street
Global Markets, the company�s investment research and trading arm.
�The two platforms are extraordinarily complementary with almost no
overlap. Once this transaction closes, we will move quickly to
integrate Currenex�s technology with Global Link, our multi-asset
class trading platform, and continue to invest in the platforms to
deliver the most complete and technologically advanced set of
products available in the market.� FX Connect�s pioneering
capabilities in electronic foreign exchange trading and Currenex�s
focus on servicing high-volume, high frequency trading activity
represent the broadest range of capabilities and the deepest
liquidity available in the market today. �This move leverages the
strengths of two innovators who share a similar strategic vision of
creating best of breed and flexible electronic trading solutions,�
said Cliff Lewis, chairman and CEO of Currenex. �This acquisition
will enable us to continue providing sophisticated customers with
the market-leading tools they need to maintain their competitive
edge in an increasingly complex and dynamic global environment.�
Notes to Editors: About Global Link: State Street�s Global Link
network delivers unique fact-based research, decision support tools
and trading technology for five asset classes to clients around the
world. It offers world market research and analytics for equities,
fixed income and foreign exchange and secure, real-time trade
execution services across multiple asset classes. More information
about Global Link can be found at www.globallink.com. About State
Street Corporation: State Street Corporation (NYSE: STT) is the
world's leading specialist in providing institutional investors
with investment servicing, investment management and investment
research and trading services. With US$11.9 trillion in assets
under custody and US$1.7 trillion in assets under management as of
December 31, 2006, State Street operates in 26 countries and more
than 100 geographic markets worldwide. For more information, visit
State Street�s website at www.statestreet.com. About State Street
Global Markets: State Street Global Markets provides specialized
investment research and trading in foreign exchange, equities,
fixed income and derivatives. Its goal is to enhance and preserve
portfolio values for asset managers and asset owners. From its
unique position at the crossroads of the global markets, it creates
and unlocks value for its clients with original flow-based
research, innovative portfolio strategies, trade process
optimization, and global connectivity across multiple asset classes
and markets. About Currenex: Currenex Inc. received the 2006 e-FX
award for �Best Trading Technology Vendor.� Offering Executable
Streaming Prices (ESP�), Request For Streams (RFS), Benchmark
Trading, Algorithmic Trading, and complete Prime Brokerage
functionality with fully integrated Straight Through Processing
(STP), Currenex connects more than 60 global banks to a superior
electronic trading network, making Currenex one of the deepest
liquidity pools in Forex. Accessed through a global electronic
communications network, Currenex patented technology is also
available to users in privately-branded solutions. Additional
information can be found at www.currenex.com This news announcement
contains forward-looking statements as defined by United States
securities laws, including statements about the financial outlook
and business environment. Those statements are based on current
expectations and involve a number of risks and uncertainties,
including those related to the pace at which State Street adds new
clients or at which existing clients use additional services, the
value of global and regional financial markets, the pace of
cross-border investment activity, changes in interest rates, the
pace of worldwide economic growth and rates of inflation, the
extent of volatility in currency markets, consolidations among
clients and competitors, State Street�s business mix, the dynamics
of markets State Street serves, and State Street�s success at
integrating and converting acquisitions into its business. Other
important factors that could cause actual results to differ
materially from those indicated by any forward-looking statements,
are set forth in State Street's 2005 annual report on Form 10-K,
particularly in Item 1A, �Risk Factors,� and the Corporation�s
subsequent SEC filings which should be read before making any
investment decision. The forward-looking statements contained in
this press release speak only as of the date hereof, January 22,
2007, and the Corporation will not undertake efforts to revise
those forward-looking statements to reflect events after this date.
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