Bain Capital is leading a group of private equity firms - including TA Associates and Silver Lake Partners - in the acquisition of a majority stake in The Island ECN from Datek Online.
Under the agreement, the equity partners will secure a 90% stake in Island, an alternative trading system which accounts for approximately one out of every eight trades on Nasdaq. Datek's majority shareholding will be reduced to less than ten per cent.
Island says the diversification of ownership will leave it in a stronger position to step up its efforts to become the US's first for-profit exchange. "We have been pleased with the encouragement received from the US Securities and Exchange Commission about our plans for this sort of diversification, and expect today's announcement to be viewed favourably," says Matthew Andresen, Island president and CEO.
So far this year, Island has traded more than 47 billion shares, worth over $3.15 trillion. In the third quarter 2000, Island says its share volume increased 88 percent over the third quarter volume a year ago. Yesterday, Island claimed a new record by executing over 360 million shares.