The Nasdaq OMX Group, Inc. (Nasdaq:NDAQ) today announced the completion of its acquisition of the eSpeed platform, which operates a fully executable central limit order book for electronic trading in benchmark U.S. Treasuries, one of the largest and most liquid cash markets in the world.
The eSpeed platform will be integrated into the NASDAQ OMX Transaction Services business to better serve dealers in the over-the-counter market and meet the growing demand for diverse instruments on an independent market. U.S. Treasury data products will be integrated into NASDAQ OMX Global Information Services, further enhancing NASDAQ OMX's rich data product offering.
"We are beginning to see a fundamental shift in underlying drivers of the U.S. Treasury market and we feel the addition of eSpeed to NASDAQ OMX's portfolio will provide our combined customer base with a significantly expanded opportunity set," said Bob Greifeld, Chief Executive Officer of NASDAQ OMX. "As the liquidity dynamics in the U.S. Treasury market evolve through the government's tapering of the quantitative easing program, our customers will be well-positioned to assess their strategic investments across fixed income, equities and derivatives globally."
NASDAQ OMX announced its intent to acquire the eSpeed platform on April 1, 2013 to enter benchmark U.S. Treasuries, one of the largest markets in the world with over $500 billion in daily trading volume. The addition of the eSpeed platform provides NASDAQ OMX clients an opportunity to navigate the benchmark U.S. Treasuries market with services for the full life-cycle of global fixed income trading. eSpeed is well positioned, through the independent ownership of NASDAQ OMX, to benefit from the normalization of the U.S. bond market and the core drivers of volumes like stability in the issuance of new Treasuries, continued electronification of the U.S. Treasury market, resolution of fiscal uncertainty and changes in government intervention through quantitative easing.
"We are excited about the future as the talent, technology and market knowledge we are acquiring creates a significant competitive advantage," said Eric Noll, Executive Vice President, Transaction Services U.S. and U.K. at NASDAQ OMX. "The addition of eSpeed to our transaction business will make NASDAQ OMX a leading, global player in a new asset class and will better serve dealers in the over-the-counter market along the value chain from pre- to post-trade."
NASDAQ OMX expects the acquisition to be accretive to earnings within the first 12 months, excluding transaction-related costs, and to generate attractive returns on capital.
NASDAQ OMX's Transaction Services business provides the financial services community with trading platforms, market quality programs and solutions that reduce operational costs for a wide range of market participants with various investment strategies, time horizons and risk tolerance. The business operates the world's most liquid marketplace for U.S. equities, as well as options, exchange-traded products and futures platforms across the globe.