Instinet has completed the acquisition of ProTrader Group, a provider of trading technologies and electronic brokerage services primarily for retail active traders and hedge funds. The acquisition excludes ProTrader's proprietary trading business.
Instinet acquired ProTrader for $100 million in cash and 5.02 million shares of common stock valued at $50 million. The deal, first announced in mid-July, closed yesterday.
The acquisition will expand Instinet's reach into the hedge fund market and retail active trader segments by providing a full-service offering with front end technology, executions, and back-office operations.
Jay McEntire, CEO of ProTrader, says: "ProTrader will continue to focus its efforts and services on supporting semi-professional and professional active traders, as well as actively traded hedge fund portfolios with less than $100 million under management."
ProTrader's proprietary trading business has been spun off into two independent operations, namely Zone Trading Partners and Zone Equity Partners. In the fourth quarter, Instinet Clearing Services. (ICS) will become the correspondent clearing facility for ProTrader. The two proprietary entities will be customers of ProTrader and will enter into an agreement with ICS to clear their trades.