ITG (NYSE:ITG), a leading independent broker and financial technology provider, today announced that it has signed a definitive agreement to sell ITG Investment Research to Leucadia National Corporation (NYSE:LUK), a diversified holding company.
Subject to customary conditions, the transaction is expected to close at the end of May 2016. Upon close, ITG Investment Research will operate as M Science.
Under the terms of the agreement, Leucadia will acquire ITG Investment Research for $12 million in cash. ITG expects to generate a net increase in cash of more than $5 million. ITG does not expect to book a material gain or loss from this transaction after related costs and taxes and the write-down of the remaining intangibles associated with ITG Investment Research.
ITG Investment Research currently provides data driven research in the Consumer, Telecom, Media, Technology and Macro sectors, covering more than 200 companies.
ITG will continue to deliver energy research to institutional investors under its prior agreement following the sale of RS Energy Group to an affiliate of Warburg Pincus in December 2015.
ITG also announced today that it plans to take a restructuring charge of approximately $1.6 million to reduce the headcount within its U.S. high-touch sales trading operation as a result of this sale. ITG expects to realize cost savings of approximately $3 million annually as a result of this action.
Commenting on the sale, ITG Chief Executive Officer and President, Frank Troise, said, “The sale of our remaining research operations and the associated cost reduction measures we took today provide clarity to our clients, our shareholders and our employees that our strategic focus and resource allocation will be applied to our core capabilities in execution, liquidity, platforms and analytics. We thank our colleagues for their dedication and contributions to our firm.”
ITG will provide more details about these developments, including forecasted impacts on revenues and expenses, after the transaction closes.