KCG Holdings, Inc. (NYSE: KCG) (“KCG”) today announced that it has entered into a definitive agreement to acquire Neonet Securities AB (“Neonet”), an independent agency broker and execution specialist based in Stockholm, Sweden from its shareholders, Hay Tor Capital, KAS BANK and Cidron Delfi Intressenter Holding.
Financial terms were not disclosed.
Founded in 1996, Neonet provides a comprehensive suite of advanced algorithmic trading, smart order routing and sales trading primarily in European equities across 30 public and private markets to approximately 200 clients in more than 20 countries. Neonet strives to deliver transparent execution services to banks, brokers and financial institutions with an optimized balance of quality and cost. The acquisition will strengthen KCG’s reach in continental Europe and will enable both KCG’s and Neonet’s clients to access a more complete range of international execution services and capabilities.
Philip Allison, Chief Executive Officer of KCG Europe Limited, said, “We are pleased to announce an agreement to acquire Neonet, a Nordic pioneer in trading and execution services, as we broaden our European reach and continue to bolster our ability to provide clients with global execution solutions. Neonet’s sophisticated technology, experienced trading desks, and deep team of execution specialists are highly complementary to our existing execution services and will help accelerate the growth of our agency client business.”
John Ashdown, Managing Partner at Hay Tor Capital, said, “We are delighted that such a major industry participant as KCG will now take the Neonet business forward to the next level at an immensely exciting time of industry transformation in Europe.”
Tim Wildenberg, Chief Executive Officer of Neonet, added, “We are excited to join forces with KCG, an established market leader in global execution services. For the last 20 years, Neonet has focused on putting clients first and providing them with transparent execution services, as well as deep knowledge of international financial markets. We look forward to leveraging KCG’s significant expertise across asset classes in the U.S. and Europe for the benefit of our clients worldwide for years to come.”
The transaction, which is subject to customary regulatory and other approvals, is expected to close later this year. Neonet will continue to be led by Mr. Wildenberg and will maintain the company’s headquarters in Stockholm following the close. The transaction is expected to result in cost savings through consolidating exchange memberships, market data, routing and other operational costs while simultaneously expanding KCG’s breadth and commitment to Europe. KCG expects the acquisition will be slightly accretive to earnings in 2017.
KCG was advised on the transaction by Advokatfirman Vinge KB and Sullivan & Cromwell LLP. NovitasFTCL and Advokatfirman Delphi served as financial and legal advisors, respectively, to the shareholders of Neonet.