NEW YORK, May 26, 2021 /PRNewswire/ -- BGC Partners,
Inc. (Nasdaq: BGCP) ("BGC"), a leading global brokerage and
financial technology company, announced today that it has entered
into an agreement to sell its Insurance Brokerage business for
$500 million of cash consideration to
The Ardonagh Group Limited ("Ardonagh").
MANAGEMENT COMMENTS:
Howard W. Lutnick, Chairman and Chief Executive Officer of
BGC, said: "The agreement to sell our Insurance Brokerage business
for $500 million reflects the
significant value we have created since entering this market in
2017. Like our previous sales of eSpeed and Trayport, as well as
our IPO and tax-free spin-off of Newmark, this sale further
demonstrates our commitment to driving shareholder value.
While we have built an exceptional Insurance Brokerage business,
this sale will focus our resources on Fenics. We expect to use the
proceeds to accelerate Fenics growth and to repurchase shares
and/or units.
Ardonagh is an excellent partner to continue our Insurance
Brokerage business. The combined platform will add to their
strength, capability, and create the world's leading independent
specialty insurance broker.
While our Insurance Brokerage business provided less than 10
percent of BGC's total revenue over the trailing
twelve-months1, the $500
million of cash that we expect to receive represents over 17
percent of BGC's fully diluted market
capitalization2.
The sale proceeds will provide additional capital to accelerate
Fenics growth, which increased 40 percent year-over-year in the
first quarter of 2021. Additionally, our Fenics Growth Platforms,
which include Fenics UST, Fenics GO, Lucera, Fenics FX, and other
newer standalone platforms, grew more than 82 percent over the same
period. While the growth of our Insurance Brokerage business was
industry-leading, we believe the scale and scope of the Fenics
opportunity is far greater, with potential to drive shareholder
value materially higher."
Mr. Lutnick, concluded: "We have been clear and consistent about
our plans to express the value of BGC's assets. This transaction
demonstrates our commitment to increase shareholder value and focus
our interest on Fenics, which we believe represents the greatest
opportunity for our Company."
PROPOSED TRANSACTION DETAILS AND FINANCIAL IMPACT:
Under the terms of the purchase agreement, Ardonagh will acquire
the equity of the entities that comprise BGC's Insurance Brokerage
business3. BGC will receive $500
million in cash, subject to limited adjustments, upon
completion of the transaction.
The transaction is expected to close in the second half of 2021,
subject to customary closing conditions, including the receipt of
required regulatory approvals.
The one-time gain associated with the transaction will be
reflected in BGC's consolidated results under U.S. Generally
Accepted Accounting Principles (GAAP) but will be excluded from the
Company's results for Adjusted Earnings.
BGC's Insurance Brokerage business contributed approximately
$191 million4 in
revenue during the twelve-month period ending March 31, 2021.
BGC intends to use the proceeds from the sale to invest in its
Fenics business, to repurchase BGC shares and/or units, and for
general corporate purposes.
ADVISORS:
Cantor Fitzgerald & Co. and Bank of America are serving as
financial advisors, and Bryan Cave Leighton Paisner LLP is acting
as counsel to BGC.
About BGC Partners, Inc.
BGC Partners, Inc. ("BGC") is
a leading global brokerage and financial technology
company. BGC specializes in the brokerage of a broad range of
products, including Fixed Income (Rates and Credit), Foreign
Exchange, Equities, Energy and Commodities, Shipping, Insurance,
and Futures. BGC also provides a wide variety of services,
including trade execution, brokerage, clearing, trade compression,
post-trade, information, and other back-office services to a broad
range of financial and non-financial institutions. Through brands
including Fenics, BGC Trader, Capitalab, Lucera, and Fenics Market
Data, BGC offers financial technology solutions, market data, and
analytics related to numerous financial instruments and markets.
BGC, BGC Trader, GFI, Fenics, Fenics Market Data, Capitalab,
Lucera, Corant Global, Corant, and Piiq are trademarks/service
marks and/or registered trademarks/service marks of BGC and/or its
affiliates.
BGC's customers include many of the world's largest banks,
broker-dealers, investment banks, trading firms, hedge funds,
governments, corporations, and investment firms. BGC's Class A
common stock trades on the NASDAQ Global Select Market under the
ticker symbol "BGCP". BGC is led by Chairman of the Board and Chief
Executive Officer Howard W. Lutnick.
For more information, please visit http://www.bgcpartners.com. You
can also follow BGC at https://twitter.com/bgcpartners,
https://www.linkedin.com/company/bgc-partners and/or
http://ir.bgcpartners.com/Investors/default.aspx.
About The Ardonagh Group
The Ardonagh Group is the
UK's largest independent insurance broker powered by a network of
over 100 international locations across the UK and Ireland and a workforce of over 7,000 people.
Formed in 2017, Ardonagh today brings together best-in-class brands
including Autonet, Arachas, Bishopsgate, Broker Network,
Carole Nash, Compass Networks, Ethos
Broking, Geo Underwriting, Price Forbes, Swinton, Towergate and
URIS.
Discussion of Forward-Looking Statements about BGC
Statements in this document regarding BGC that are not historical
facts are "forward-looking statements" that involve risks and
uncertainties, which could cause actual results to differ from
those contained in the forward-looking statements. These include
statements about the effects of the COVID-19 pandemic on the
Company's business, results, financial position, liquidity and
outlook, which may constitute forward-looking statements and are
subject to the risk that the actual impact may differ, possibly
materially, from what is currently expected. Except as required by
law, BGC undertakes no obligation to update any forward-looking
statements. For a discussion of additional risks and uncertainties,
which could cause actual results to differ from those contained in
the forward-looking statements, see BGC's Securities and Exchange
Commission filings, including, but not limited to, the risk factors
and Special Note on Forward-Looking Information set forth in these
filings and any updates to such risk factors and Special Note on
Forward-Looking Information contained in subsequent reports on Form
10-K, Form 10-Q or Form 8-K.
Media Contact:
Karen Laureano-Rikardsen
+1 212-829-4975
Investor Contact:
Jason Chryssicas
+1 212-610-2426
1 Trailing twelve-month period ending
March 31, 2021.
2 Calculated using BGC's closing stock price on
May 25, 2021 of $5.24 and the Company's fully diluted share count
of 557.0 million as of period-end March 31,
2021.
3 Includes Ed Broking Group Limited and Besso
Insurance Group Limited, each wholly owned subsidiaries of BGC.
4 Includes interest and dividend income and other
revenues.
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SOURCE BGC Partners, Inc.