Paris-based GL Trade has acquired the overseas business of US-based Nyfix, which specialises in the provision of order management systems for the derivatives markets.
The $7.7 million deal is consistent with GL Trade's strategy of providing consolidated front-to-back office trading systems and strengthens the vendor's presence in the London investment banking market.
Around 20 clients, including some significant tier one firms, already use Nyfix Overseas technology for their order management. The company anticipates a turnover of around $7.5m in 2006 and employs 45 staff, mainly based in London.
Jon Steward, previously CEO of Nyfix Overseas, is appointed deputy to GL Trade's London Northern Europe CEO, Patrick Tessier. He will be in charge of the derivatives business development with a special focus on UK customers. Mike Hughes SVP products & technology and John Fretwell, SVP operations, will continue to report to Steward.
Peter Hansen, chairman of Nyfix Inc, comments: "Nyfix Inc has decided to focus on its core business – FIX Order routing within the global equities markets and associated transaction offerings. We therefore sold Nyfix Overseas' business to an ISV that is very active on derivatives markets and able to ensure the further development of the company."
The US vendor estimates recording a net gain on the transaction of approximately $4.5 million after deducting related legal, accounting and placement fees and the equity held in Nyfix Overseas just prior to the sale.
The acquisition by GL Trade follows last month's purchase of Emos Systems, a French company specialising in middle office derivatives with annual revenue of €2m.
News of the deal comes as GL Trade reports turnover of €90m in the first half of 2006, up 3.4% on last year’s figure, boosted by a strong showing in the Asia pacific and US markets.
Group net profit slipped from €10.4 million to €8.9 million, however, due to "unfavourable foreign currency trends, the deconsolidation of an equity-accounted investment in August 2005, and by the use of a one-time deficit carry forward in the first half of 2005".