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Advent International buys majority stake in BondDesk Group

07 June 2006  |  2540 views  |  0 Source: Advent International

Advent International, a leading global private equity firm, today announced it has agreed to acquire a majority interest in BondDesk Group, the leading Alternative Trading System (ATS) focused on odd-lot fixed-income execution and provider of software solutions to the securities industry, in partnership with the company's senior management team.

The transaction is subject to routine regulatory approval. Financial details of the acquisition were not disclosed.

Founded in 1999, BondDesk was the first ATS to focus on odd-lot bond execution and today operates the leading retail fixed-income trading platform. Through its proprietary BondDesk ATS, clients access over 30,000 live taxable and tax-exempt security offerings and execute over 20,000 transactions per day. BondDesk's broker-dealer clients include bulge-bracket firms, regional firms, online broker-dealers, and correspondent networks.

The long-term prospects for retail bond trading are positive with the aging of the baby boomers and pending rotation of assets into the fixed-income market. In addition, as transparency and overall acceptance of retail fixed-income trading increases, Advent and BondDesk management are bullish about the prospects for double-digit market growth.

"With demographic trends driving long-term demand for fixed-income trading, we expect continued favorable market conditions for BondDesk," said Chris Pike, Partner, Advent International. "The company's trading system provides unmatched liquidity, as well as pre-trade analytical tools geared towards making bond trading easier for retail financial advisors and fixed-income traders. Advent is excited to be working in partnership with BondDesk's management team to continue building on the company's strong foundation."

"In partnership with our broker-dealer clients, BondDesk developed a highly comprehensive trading platform for financial advisors and fixed-income traders, providing them with greater efficiency, transparency, ease of use, and unparalleled access to odd-lot fixed-income markets," said Robert Slaymaker, CEO, BondDesk. "With Advent as our partner we will continue to execute our original strategy. We also gain access to their deep financial markets expertise, as well as their global network of investment professionals and contacts."

Chris Egan, Principal at Advent International, commented: "BondDesk has over 90 broker-dealers using the ATS, including the leading retail financial advisory firms. Over 25% of the financial advisors in the US have access to the BondDesk ATS, representing more than 75,000 brokers and investment advisors."

Additionally, the investment in BondDesk continues Advent's successful financial technology and services investments in companies such as Datek Online/Ameritrade, The Island ECN/Instinet and more recently GFI Group, one of the world's leading inter-dealer brokers of over-the-counter derivatives and related securities. With the pricing of GFI's secondary offering on May 18, 2006, Advent has now disposed of 90% of its original position in GFI. During its four years on the board of GFI, Advent worked closely with management to grow its core business and execute its transition to the public equity markets, with revenue and EBITDA reaching $534 million and $103 million respectively in 2005. GFI completed its IPO in January 2005, at $21 per share, valuing the business at $560 million. By year end, the stock had risen 126% to more than $47; making it the ninth best-performing stock of 231 US new issues that year.(1) These transactions illustrate Advent's expertise and focus in the financial technology and services sector, as well as its ongoing commitment to add value to its portfolio companies.

In connection with the transaction, Advent will join the company's board of directors. Pepper Hamilton served as legal counsel to Advent, PricewaterhouseCoopers LLP provided accounting services and UBS Investment Bank acted as Advent's M&A adviser. American Capital and Merrill Lynch Capital are leading the debt financing to support Advent's buyout. Banc of America Securities LLC served as financial advisor to BondDesk and Wollmuth Maher & Deutsch served as legal counsel to the company and selling unit-holders.

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