Bank of New York, Eze Castle Software And GTCR Golden Rauner Form New Company

The Bank of New York Company, Inc. is joining forces with Eze Castle Software and GTCR Golder Rauner, LLC, a private equity firm, to form a new company that will bring together BNY Securities Group's trade execution, commission management, independent

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The Bank of New York Company, Inc. is joining forces with Eze Castle Software and GTCR Golder Rauner, LLC, a private equity firm, to form a new company that will bring together BNY Securities Group’s trade execution, commission management, independent research and transition management businesses with Eze Castle Software, a leading provider of trade order management and related investment technologies.

The new firm, to be called BNY ConvergEx Group, is expected to be established by the end of September, pending regulatory approval. The new company will be a leading global agency brokerage and technology company offering a complete spectrum of pre-trade, trade, and post-trade solutions for traditional money managers, hedge funds, broker-dealers, corporations and plan sponsors. The company’s comprehensive suite of services, advanced technology offerings and breadth of distribution channels will enable its customers to manage all aspects of the trade life-cycle, including idea generation, research, analysis, trading and execution, risk management, compliance and portfolio management. It will also have a strong capital base to support its future growth.

The Bank of New York Company and GTCR Golder Rauner will each hold a 35.4 percent stake in the new company, with the balance held by Eze Castle Software’s investors and BNY ConvergEx Group’s management team. The new company, with proforma 2005 revenues of approximately USD340 million, will be an affiliate of The Bank of New York and will be reflected on the Company’s financial statements as an equity investment. The transaction is not expected to result in any net gain or loss for The Bank of New York and is expected to be neutral to earnings.

In addition to Eze Castle Software, the BNY Securities Group businesses to be included in BNY ConvergEx Group will be BNY Brokerage, Lynch, Jones & Ryan, G-Port, Westminster Research and BNY Jaywalk. Each business will retain its respective brand name and continue to operate as it does today, while taking advantage of the combined capabilities of BNY ConvergEx Group. In addition, The Bank of New York’s B-Trade and G-Trade businesses are expected to become part of BNY ConvergEx Group in 2008, although in the interim they will continue to be owned by The Bank of New York. The Bank of New York Company’s Pershing subsidiary, a leading global provider of clearing and financial services outsourcing, is not included in the transaction.

“The formation of BNY ConvergEx Group creates a new, more powerful organisation that combines our current capabilities with one of the leading trade order management providers, backed by a leading private equity firm,” says Thomas A. Renyi, the chairman and chief executive officer of The Bank of New York Company. “By establishing BNY ConvergEx Group, we will be well positioned to accelerate the capital investments needed for expanding the products and services that will allow us to win and grow in a rapidly changing marketplace. As an affiliate, BNY ConvergEx Group will continue to be an integral part of The Bank of New York’s offerings, providing a broader array of agency brokerage, order management and global transition management solutions to our institutional clients worldwide. In addition, the new firm will represent an attractive equity investment for us.”

The BNY ConvergEx Group brand name was chosen to reflect the convergence of technologies required to provide open solutions that span the investment cycle. Approximately 635 employees from BNY Securities Group and Eze Castle Software will become part of BNY ConvergEx Group. BNY ConvergEx Group will have a global presence in New York, Boston, San Francisco, Chicago, Dallas, Stamford, London, Bermuda, Tokyo, Hong Kong, and Sydney.

“Our team at Eze Castle Software is pleased to be joining with BNY Securities Group to harness the combined power of our two firms,” adds Thomas P. Gavin, the chief executive officer of Eze Castle Software. “Our industry-leading trade order management capabilities have helped investment management firms worldwide to automate their investment processes, and we look forward to providing an even broader suite of investment technology solutions as part of BNY ConvergEx Group.”

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