New York interdealer broker GFI Group has acquired London-based trading technology vendor Trayport in an all-cash deal worth £84 million.
Founded in 1993, privately-held Trayport specialises in providing software to the European OTC energy markets such as electric power, natural gas, coal, emissions and freight.
However the firm's GlobalVision package - which includes platforms for exchanges, brokers and traders - supports electronic trading in all commodity and financial instruments and is particularly widespread in energy derivatives, says GFI.
The vendor's multi-broker trading system aggregates multiple liquidity pools onto a single screen whilst whiteboard and market information systems provide market pricing data and communication.
GFI is a Trayport customer, along with firms including Icap, Tullett-Prebon, OneChicago, the European Energy Exchange, the New Zealand Stock Exchange, Merrill Lynch and Barclays.
GFI says Trayport will have estimated revenues of £14 million for the fiscal year ending 31 January 2008.
Commenting on the acquisition, Michael Gooch, chairman and CEO, GFI, says Trayport will build on and boost GFI's electronic trading capabilities in OTC energy markets.
"Through the addition of Trayport, GFI's products and services will be fully integrated into the desktop, middle office and back office of our European energy customers. Additionally, we will be able to streamline the introduction of new product offerings in all our regions," adds Gooch.
GFI says the £84 million purchase price includes £9 million for excess working capital, mostly in the form of surplus cash.
The broker financed the all cash deal through a private placement of senior secured notes and by increasing its credit facility. GFI expects the deal to be neutral to non-GAAP earnings in 2008 and accretive thereafter.