CHICAGO, March 24, 2021 /PRNewswire/ -- Cboe Global
Markets, Inc. (Cboe: CBOE), a market operator and global trading
solutions provider, today announced it has entered into a
definitive agreement to acquire Chi-X Asia Pacific Holdings, Ltd.
(Chi-X Asia Pacific), an alternative market operator and provider
of innovative market solutions, from J.C. Flowers & Co. LLC.
This acquisition will provide Cboe with a single point of entry
into two key capital markets – Australia and Japan – to help enable it to expand its global
equities business into Asia
Pacific, bring other products and services to the region,
and further expand access to its unique proprietary product suite
in the region. The transaction is expected to close in the second
or third quarter of 2021, subject to regulatory review and other
customary closing conditions.
Ed Tilly, Chairman, President and
CEO at Cboe Global Markets, said: "With the planned acquisition of
Chi-X Asia Pacific, we continue to execute on our growth strategy
by broadening our geographic and asset class presence, while
enabling the further extension of our product offerings to our
global network of customers. This is an exciting investment in
attractive, growing markets that will complement our North American
and European operations and provide a foothold in the key
Asia Pacific region, positioning
us to become a truly global marketplace for our customers. In a
short number of years, the Chi-X Asia Pacific team has built their
business into one of the largest market operators in Asia Pacific. We look forward to working with
them to accelerate the company's further growth, building on our
shared cultures of innovation and customer-first approach as we aim
to bring greater choice to investors in Asia Pacific."
Chi-X Asia Pacific is one of the most successful alternative
market operators in Asia Pacific,
with core operations in Australia
and Japan. Chi-X Australia (CXA),
the country's second largest securities exchange achieving an 18.4
percent total market share[1], offers trading in all
Australian-listed securities, as well as the exclusive trading of
CXA quoted warrants and ETFs. Chi-X Japan (CXJ), a leading
proprietary trading system for Japanese equities and third largest
equities venue in the country with a 2.7 percent lit market
share[2], offers four trading books including both displayed and
non-displayed mechanisms.
David Howson, currently President
of Cboe's European operations will lead the company's business
expansion into the region and has been promoted to President,
Europe and Asia Pacific. Mr. Howson will work closely
with the global Cboe team and with the Chi-X Asia Pacific local
management teams led by Vic Jokovic,
Chief Executive Officer at Chi-X Australia and Toru Irokawa,
Representative Director and President at Chi-X Japan, who will
continue to lead their businesses.
Cboe plans to leverage Chi-X Asia Pacific's expansive presence
in Asia Pacific and bring to the
region BIDS Trading's industry-leading block trading capabilities.
With BIDS' current network covering major North American and
European equities markets, the addition of Asia Pacific equities is expected to create a
global block trading platform to serve a broader base of customers.
Cboe also expects to enhance investor access to other
products and services. In particular, Chi-X Asia Pacific is
expected to provide an expanded distribution network enabling Cboe
to further offer its unique proprietary products to clients in
Australia and Japan.
This deal also creates an opportunity for Cboe to become the
global leader in equities market data, offering comprehensive data
from most major markets around the world including the U.S.,
Canada, Australia, Japan and 15 European countries.
The planned acquisition builds on Cboe's newly created Data and
Access Solutions business, which combines Cboe Information
Solutions with its global market data and access services into one
holistic offering, enabling customers around the world greater
access to all of Cboe's expanded data and analytics capabilities
through a unified offering.
Mr. Jokovic said: "Over the past decade, Chi-X Australia has
built an enviable reputation as an innovative market operator with
superior market expertise, customer service and a pioneering spirit
that strongly aligns with Cboe's legacy of product and market
innovation. We are excited to draw upon Cboe's core strengths as a
leading global exchange operator to further enhance the competitive
landscape in the Australian markets with new innovation and market
solutions to better meet customer needs."
Mr. Irokawa said: "Chi-X Japan is currently the only
broker-neutral proprietary trading system in Japan, and remains committed to delivering
best execution and significant cost-savings for both retail and
institutional investors through our superior services and rich set
of trading solutions. With Cboe's investment in Chi-X Japan, we
look forward to enhancing our capabilities and bringing vital
competition to help strengthen the efficiency and resiliency of the
entire Japanese equities market."
Australia is the world's
9th largest global economy, representing approximately
$2.2 trillion in market
capitalization and averaging 4.6 billion shares traded a day in its
equities market[3]. Japan ranks as
the 4th largest global economy, representing
$6.2 trillion in market
capitalization with over $5.1
trillion total value traded annually in its equities
market[4].
Cboe plans to fund the transaction with cash on hand,
supplemented by existing credit agreements, if needed. The
transaction is expected to close in the second or third quarter of
2021, subject to regulatory review and other customary closing
conditions. Terms of the deal were not disclosed, however the
company noted that the purchase price is not material from a
financial perspective and is expected to be nominally accretive to
the company's adjusted earnings in 2021. Chi-X Asia Pacific
generated approximately $26 million in net revenue for
the twelve months ended December 31,
2020, reflecting a 26 percent growth rate compared to the
prior year, with non-transactional revenue comprising 67 percent of
the overall net revenue. For additional background information on
Chi-X Asia Pacific, see the slide deck available under events and
presentations on Cboe's Investor Relations website
at http://ir.cboe.com/events-and-presentations.
Legal advisors to Cboe Global Markets on the transaction are
Sidley Austin LLP (U.S. and Hong
Kong), King & Wood Mallesons (Australia), Nagashima Ohno & Tsunematsu
(Japan) and SyCip Salazar
Hernandez & Gatmaitan (Philippines), with BofA Securities serving as
financial advisor.
About Cboe Global Markets, Inc.
Cboe Global Markets (Cboe: CBOE) provides cutting-edge trading
and investment solutions to market participants around the world.
The company is committed to defining markets through product
innovation, leading edge technology and seamless trading
solutions.
The company offers trading across a diverse range of products in
multiple asset classes and geographies, including options, futures,
U.S., Canadian and European equities, exchange-traded products
(ETPs), global foreign exchange (FX) and volatility products based
on the Cboe Volatility Index (VIX Index), recognized as the world's
premier gauge of U.S. equity market volatility.
Cboe's subsidiaries include the largest options exchange and the
third largest stock exchange operator in the U.S. In addition, the
company operates one of the largest stock exchanges by value traded
in Europe, and owns EuroCCP, a
leading pan-European equities clearing house. Cboe also is a
leading market globally for ETP listings and
trading.
The company is headquartered in Chicago with a network of domestic and global
offices across the Americas, Europe and Asia, including main hubs in New York, London, Kansas
City and Amsterdam. For
more information, visit www.cboe.com.
About Chi-X Asia Pacific Holdings, Ltd.
Chi-X Asia Pacific Holdings, Ltd. ("Chi-X Asia Pacific")
is a leader in driving marketplace innovation across the
Asia-Pacific region. For
over a decade the business has been operating trading venues and
generating pioneering products and services for the benefit of
financial markets and the global trading community. The
company believes that modern competition from technology-driven
markets increases overall market volumes and improves investor
performance, providing benefits to all participants. As an
alternative market operator, Chi-X Asia Pacific operates market
centers two of the Asia-Pacific
region's key securities trading centers in Australia and Japan, while its Chi-TechTM
technology services units provide technology to its
business.
Chi-X Asia Pacific was acquired from its former global parent in
2016 by funds advised by JC Flowers & Co. LLC and has grown
rapidly in the ensuing years. Chi-X Australia, as the second
largest securities exchange in Australia, is transforming the Australian
investment market through its focus on customers and innovation.
Chi-X Australia delivers easy, cost-effective access to local and
global investment opportunities, including a full suite of services
for exchange traded investment products and cash equities as well
as an investment products platform including Warrants, Indices (CXA
200), innovative Transferable Custody Receipts and ETFs/QMFs.
Chi-X Japan, as a leading proprietary trading system in
Japan, operates four equity
trading venues, including both lit and dark, to provide solutions
to evolving needs of market participants and provide members and
investors with better trading opportunities at lower cost under
highly transparent rules. Chi-Tech provides the trading
technology platform and support services that keep the Chi-X Asia
Pacific market centers at the forefront of the industry in
performance and reliability.
The company maintains offices in Sydney, Tokyo, Hong
Kong, and Manila. For more information, visit
www.chi-x.com.
Media
Contacts
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Analyst
Contact
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Angela
Tu
+1-646-856-8734
atu@cboe.com
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Tim
Cave
+44 (0)
7593-506-719
tcave@cboe.com
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Debbie
Koopman
+1-312-786-7136
koopman@cboe.com
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CBOE-C
CBOE-OE
Cboe®, Cboe Global Markets®, Cboe Volatility Index®, and VIX®
are registered trademarks of Cboe Exchange, Inc. Chi-X Asia
Pacific, Chi-X Australia and Chi-X Japan are registered trademarks
of Chi-X Asia Pacific Holdings, Ltd. All other trademarks and
service marks are the property of their respective owners.
Cautionary Statements Regarding Forward-Looking
Information
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
that involve a number of risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "might,"
"should," "expect," "plan," "anticipate," "believe," "estimate,"
"predict," "potential" or "continue," and the negative of these
terms and other comparable terminology. All statements that reflect
our expectations, assumptions or projections about the future other
than statements of historical fact are forward-looking statements.
These forward-looking statements, which are subject to known and
unknown risks, uncertainties and assumptions about us, may include
projections of our future financial performance based on our growth
strategies and anticipated trends in our business. These statements
are only predictions based on our current expectations and
projections about future events. There are important factors that
could cause our actual results, level of activity, performance or
achievements to differ materially from those expressed or implied
by the forward-looking statements.
We operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time,
and it is not possible to predict all risks and uncertainties, nor
can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements.
Some factors that could cause actual results to differ include:
the satisfaction of the conditions precedent to the consummation of
the proposed transaction, including, without limitation, the
receipt of regulatory approvals on the terms desired or
anticipated; the impact of the novel coronavirus ("COVID-19")
pandemic, including changes to trading behavior broadly in the
market; the loss of our right to exclusively list and trade certain
index options and futures products; economic, political and market
conditions; compliance with legal and regulatory obligations; price
competition and consolidation in our industry; decreases in trading
or clearing volumes, market data fees or a shift in the mix of
products traded on our exchanges; legislative or regulatory
changes; our ability to protect our systems and communication
networks from security risks, cybersecurity risks, insider threats
and unauthorized disclosure of confidential information; increasing
competition by foreign and domestic entities; our dependence on and
exposure to risk from third parties; fluctuations to currency
exchange rates; our index providers' ability to maintain the
quality and integrity of their indices and to perform under our
agreements; our ability to operate our business without violating
the intellectual property rights of others and the costs associated
with protecting our intellectual property rights; our ability to
attract and retain skilled management and other personnel; our
ability to minimize the risks, including our credit and default
risks, associated with operating a European clearinghouse; our
ability to accommodate trading and clearing volume and transaction
traffic, including significant increases, without failure or
degradation of performance of our systems; misconduct by those who
use our markets or our products or for whom we clear transactions;
challenges to our use of open source software code; our ability to
meet our compliance obligations, including managing potential
conflicts between our regulatory responsibilities and our
for-profit status; our ability to maintain BIDS Trading as an
independently managed and operated trading venue, separate from and
not integrated with our registered national securities exchanges;
damage to our reputation; the ability of our compliance and risk
management methods to effectively monitor and manage our risks; our
ability to manage our growth and strategic acquisitions or
alliances effectively; restrictions imposed by our debt obligations
and our ability to make payments on or refinance our debt
obligations; our ability to maintain an investment grade credit
rating; impairment of our goodwill, long-lived assets, investments
or intangible assets; and the accuracy of our estimates and
expectations. More detailed information about factors that may
affect our actual results to differ may be found in our filings
with the SEC, including in our Annual Report on Form 10-K for the
year ended December 31, 2020 and
other filings made from time to time with the SEC.
We do not undertake, and we expressly disclaim, any duty to
update any forward-looking statement whether as a result of new
information, future events or otherwise, except as required by law.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof.
1Source: Australian Securities and Investments
Commission equity market data. Based on average daily value traded
2021 YTD through February
2Based on lit market volume 2021 YTD through
February
3Source: Chi-X Asia Pacific
4World Federation of Exchanges, as of year-end
2019
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SOURCE Cboe Global Markets, Inc.