Knight Trading Group is to acquire Attain ECN, an alternative trading system that operates an electronic communications network for the trading of Nasdaq securities, from privately-held Domestic Securities.
Financial terms of the all-cash transaction were not disclosed, but Knight says the acquisition is expected to be accretive in its first year of operation.
The company said in April it was buying Direct Trading Technologies, which provides trading software to fund managers and order-routing services to ECNs.
The acquisitions are integral to Knight's plans to restructure its equity trading operations into three distinct units: broker dealers, electronic trading and institutional.
The acquisition of Attain follows last month's mega market merger announcements between Nyse and Archipelago and Nasdaq/Instinet.
Thomas Joyce, chairman and CEO, Knight, says: "In a space that is quickly losing alternatives amid recently announced consolidations, Knight will create a new liquidity centre for and with our clients."
Joyce says the new ECN will provide a stable, fast, competitively priced and anonymous execution platform for trading of Nasdaq, exchange-listed and OTC Bulletin Board securities.
The deal is expected to take up to six months to complete and is subject to appropriate regulatory approvals.
Following the acquisition, Attain will become part of Knight's newly created electronic services group, headed by Derek Stein, and will operate as a separate broker-dealer subsidiary.
Last month, Knight reported that its first-quarter earnings fell to $5.9m from $31.8m in Q1 2004, while revenue from continuing operations dropped to $137.6m from $198.3m a year ago.