ICAP Plc Has Agreed To Acquire All Of The Share Capital Of Traiana Inc.
However, the agreement is conditional on regulatory approval. The consideration for 100% of the share capital of Traiana is $238 million payable in cash and $9 million of ICAP shares that will vest within four years.
The acquisition of Traiana will be initially financed using a new acquisition facility on similar terms to ICAP’s existing 350 million facility.
For the year to 31 January 2008, Traiana’s annual revenue is estimated to be $15 million. As with other electronic businesses, Traiana is highly operationally leveraged, with a high percentage of fixed costs. The acquisition is expected to be adjusted earnings enhancing within three years and will have an immaterial dilutive effect on ICAP’s adjusted earnings per share in the short term.
This acquisition follows a number of very successful investments ICAP has made in post-trade services in recent years, including TriOptima in 2001 and Reset in 2006. With the expansion of electronic and voice broking there has been an enormous increase in trading volumes. The market has absorbed hundreds of new participants from both emerging and developed markets through prime brokerage relationships. This has created a significant increase in the pressure on middle and back offices of the banks and other market participants.
“We are very pleased to have reached agreement to acquire Traiana, the established market leader in the automation of post trade processes in the OTC markets. Post trade services is an area where technology innovation is creating exciting new business opportunities for ICAP and is an increasingly competitive necessity in growing market share in our broking business,” says Michael Spencer, group chief executive of ICAP.
“By becoming part of ICAP, Traiana will be better able to serve our existing clients and platform partners and to more rapidly expand the range of post-trade services we provide. By working together we will give our clients and the ability to grow even faster and to provide a higher level of service to their clients,” adds Gil Mndelzis, CEO, Traiana.