US electronic bond trading network MarketAxess has acquired Chicago-based FIX specialist Greenline Financial Technologies in a cash and stock deal worth around $42 million.
The purchase price consists of $35 million in cash and $7 million in MarketAxess shares. A further cash consideration of up to $3 million will be paid if Greenline meets certain earn-out targets.
Founded in 2000, Greenline provides customised integration, testing and management technology for FIX-related products and services designed to optimise electronic trading of fixed-income, equities and other exchange-based products.
The company's suite of FIX products includes VeriFIX for testing and simulation, CertiFIX for certification and client support and MagniFIX for real-time monitoring of active trading sessions. A professional services business provides clients with custom system development and proprietary software.
MarketAxess says Greenline reported total revenues of approximately $6 million for the year ended 31 December 2007, an increase of 40% on the previous 12 months.
MarketAxess says the acquisition will expand its revenue base by adding equities and exchange-traded options, futures and commodities connectivity to its fixed income options.
"The acquisition of Greenline further broadens the range of technology services that we offer to institutional financial markets, provides a meaningful expansion of our client universe, including global exchanges and hedge funds, and further diversifies our business beyond our core electronic credit trading products," says Richard McVey, chairman and CEO, MarketAxess.
There is a growing market for FIX related products and services, says MarketAxess citing a TowerGroup survey which claims 75% of buy-side and 80% of sell-side firms use FIX for electronic trading whilst 75% of all exchanges support a FIX interface.
Last year MarketAxess acquired substantially all the assets of Trade West Systems, a Utah-based provider of pricing, execution, connectivity and compliance products for the fixed income and equities markets.
MarketAxess is a rival platform to TradeWeb and MTS' BondVision system.