The Bank of New York is partnering with Eze Castle Software and private equity firm GTCR Golder Rauner to form BNY ConvergEx Group, a global agency brokerage and technology company.
The new business will combine the bank's BNY Securities Group's trade execution, commission management, research and transition management businesses with the Eze Castle unit, which provides trade order management and related investment techologies.
Approximately 635 employees from BNY Securities Group and Eze Castle Software will transfer to the new company.
The bank says its BNY Brokerage, Lynch, Jones & Ryan, G-Port, Westminster Research and BNY Jaywalk businesses will also be included with the unit, although each division will continue to retain its respective brand name and operate as it does now. The bank's B-Trade and G-Trade businesses are expected to become part of BNY ConvergEx Group in 2008.
Under the deal, BoNY and GTCR Golder Rauner will each hold a 35.4% stake in the new business, with the balance held by Eze Castle Software's investors and BNY ConvergEx Group's management team.
BoNY says the new company has proforma 2005 revenues of approximately $340 million.
Commenting on the move, Joseph Velli, senior executive vice president, BoNY and future chairman and CEO of BNY ConvergEx Group, says the new company will provide integrated trade execution, independent research, commission management and trade order management services.
"This will be an entrepreneurial organisation that will move quickly to enhance and expand our product offerings, leveraging our collective experience and market leadership to create superior growth. Additionally, as an affiliate of the Bank, BNY ConvergEx Group will enable the Bank of New York to strengthen its technologies and service offerings to its core client base," he adds.
BNY ConvergEx Group is expected to be established by the end of September, pending regulatory approval.