NEWS UPDATE
SELL-SIDE
ITG agrees to billion-dollar Virtu
takeover deal
ITG agrees to be acquired by high-speed trading firm Virtu for $30.30 a share.
I
ndependent brokerage ITG has agreed to be acquired
by high speed trading firm Virtu Financial for $30.30 a
share, in a near-$1 billion deal showing increasing consoli-
dation between institutional brokerages.
Talks between the two firms first emerged at the begin-
ning of October. The acquisition is the latest high-profile
purchase for Virtu after it took over proprietary trading
firm Knight Capital Group (KCG) in 2017 for $1.4 billion.
The deal with ITG represents a 40% premium on the
average closing share price of ITG of $21.55 in the month
prior to the news reports of the potential sale, potentially
valuing ITG at just under $1 billion.
“ITG has made tremendous progress in executing on its
Strategic Operating Plan over the past two years, and the
agreement with Virtu is a result of the dedicated efforts
of our management team and employees,” said Minder
Cheng, chairman of the board of directors, ITG.
“After careful consideration, ITG’s board of directors de-
termined that the proposal from Virtu, which provides an
immediate and significant cash premium, offers the most
value for ITG stockholders. The combination of Virtu and
ITG will create an industry-leading financial technology
franchise with true global capabilities and scale.”
Virtu stated the acquisition is a ‘natural next step’ in
its goal to offer a full range of agency services, including
transparent trading and workflow technology, analytics
8 // TheTrade // Winter 2018
and liquidity solutions.
“The combination announced today brings together
complementary strengths that amplify our ability to help
our clients source liquidity and improve their workflow,”
said Douglas Cifu, Virtu’s chief executive officer.
“We are fully committed to growing and improving the
complete agency execution offering that ITG’s clients
use every day – liquidity, execution services, workflow
technology and analytics.
“This combination will leverage Virtu’s financial technol-
ogy – the same technology that drives our market making
performance – to optimise all aspects of the business,
from order routing and algo performance to middle- and
back-office efficiency.”
JP Morgan is serving as the financial advisor and
Wachtell, Lipton, Rosen & Katz will provide legal counsel
to ITG.
ITG recently reported an adjusted net income of $5.4
million in the third quarter, compared to the adjusted net
loss of $3.6 million it suffered during the same period last
year.
It reported a net loss of $2 million in North America for
the quarter with revenues at $61.6 million, compared to
a net loss of $6.6 million last year. Meanwhile in Europe
and Asia-Pacific, net income was up $6.9 million to $58.5
million.