logo
Share SHARE
FONT-SIZE Plus   Neg

Nasdaq To Acquire ESpeed Platform From BGC Partners - Update

Exchange operator The Nasdaq OMX Group Inc. (NDAQ: Quote), Monday agreed to acquire the eSpeed platform business from BGC Partners Inc. (BGCP: Quote) in a deal valued about $1.23 billion. eSpeed is an on-the-run, U.S. Treasury fully electronic trading platform, which is expected to help Nasdaq diversify into the electronic fixed income business.

Shares of BGC Partners surged more than 40 percent in after-hours trade, on the news.

As per the terms, Nasdaq will pay $750 million in cash plus an earn-out payment of up to $484 million of NASDAQ common stock to be paid ratably over 15 years.

Nasdaq believes the deal will be accretive to its earnings within the first twelve months after closing, excluding transaction-related costs, and generate attractive returns on capital. The deal is expected to close sometime mid-2013.

"We view the eSpeed platform as a compelling extension of NASDAQ OMX's strategic direction as eSpeed is a major player in the U.S. Treasury market...," said Bob Greifeld, chief executive officer of NASDAQ.

Nasdaq expects strong growth in U.S. Treasury volumes due mainly to stability in the issuance of new Treasuries, the continued electronification of the U.S. Treasury market, and the resolution of fiscal uncertainty.

BGC will sell to NASDAQ OMX certain assets, including the eSpeed brand and contracts comprising the fully electronic portion of BGC's benchmark, on-the-run, U.S. Treasury brokerage, market data and co-location service businesses. These assets generated revenues of about $100 million in 2012. eSpeed will be a part of Nasdaq's Transaction Services business.

BGC has agreed not to compete with NASDAQ OMX in fully electronic, on-the-run, benchmark U.S. Treasury Notes and Bonds for 3 years following the close of the deal. BGC will retain all of its other voice, hybrid, and fully electronic trading, market data, and software businesses.

BGC said the one-time gain related to the $750 million payment is expected to be accretive to its net earnings per share upon closing, but will not be included in the company's results for distributable earnings.

Shares of Nasdaq closed Monday at $32.01, down 0.90%.

BGC Partners closed at $3.85, down 7.45%, on a volume of 2.7 million shares. In after hours, the stock gained $1.65 or 42.86%.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Lender Barclays Plc. Tuesday said full-year profit before tax declined 21 percent from last year, hit by items. The company noted that its Personal and Corporate Banking or PCB and Barclaycard businesses continued to thrive and grow, while Africa Banking did well despite currency headwinds. The company saw encouraging performance in several areas of Investment Bank. Fox News pundit Bill O'Reilly remains under fire amid accusations that he trumped up his role in covering international events. Only weeks after a Mother Jones article raised doubts about his claims that he was in the "warzone" during the Falklands War, the Washington Post noticed that O'Reilly once... PayPal, the online payment unit of Ebay, said it has agreed to buy mobile payment company Paydiant as part of efforts to expand its mobile offerings for merchants. The deal comes at a time when the mobile payment space is suffused with prominent players like Apple and Google, with retailers seeking their own mobile payment applications.
comments powered by Disqus
RELATED NEWS
Trade NDAQ now with 
Follow RTT