US trading technology firm Convergex Holdings has abandoned a planned IPO, agreeing instead to sell a majority stake to funds advised by CVC Capital Partners.
ConvergEx was formed in 2006 through the combination of individual Bank of New York securities business units with order management systems vendor Eze Castle Software.
The New York-based firm - which employs over 1200 staff serving more than 4000 customers - filed with regulators in May to raise up to $400 million in an initial public offering.
However, the IPO has now been abandoned and a definitive deal signed for CVC to buy the stake held by Chicago private-equity house GTCR and most of the Bank of New York Mellon's holding in an all cash deal set to close this autumn.
Bank of New York Mellon will remain as a minority shareholder and the existing ConvergEx management team, led by chairman and CEO, Joseph Velli, will remain substantial shareholders and continue to run the company.
Commenting on Convergex, Kamil Salame, head, US financial institutions group, CVC, says: "The company is well positioned to benefit from the continued growth of capital markets globally and, given CVC Financial Institutions Group's global resources and CVC's worldwide office network, we believe our partnership will be complementary."
Separately, Patsystems has agreed a conditional agreement to buy Mixit, a US based developer of sell-side order management systems and execution management Systems for equities and options trading for £17.5 million.
Under the deal, Patsystems will pay an initial consideration of £12.57 million, which could rise to £17.57 depending on Mixit's financial performance for the year ending next March. For the initial amount, £8.5 million will be in cash and the rest in 17.7 million new ordinary shares. The acquisition is expected to be earnings accretive in the first full year of ownership.
UK-based Patsystems says the deal will add to its equities business, increasing scale in a structurally growing market and improve its percentage of recurring revenues. It also hopes to cross sell Mixit products and route the company's customers' futures trades to Patsystems' global network of derivatives market connections.
David Webber, chief executive, Patsystems, says: "Mixit has rapidly established itself as a significant vendor in the North American equities OMS market. I am excited by the growth opportunities that the Group will see from repeating Mixit's success globally and leveraging the combined strengths of our technology and connectivity offerings."