This has to be the hottest Wall Street deal we’ve seen in a while.
Virtu Financial, the high-speed trading firm, will acquire KCG Holdings in an all cash transaction deal for $US1.4 billion, according to a news release out April 20. Virtu has offered KCG $US20 per share, a 12.7% premium to the firm’s Wednesday close.
The deal brought together some of Wall Street’s best-known firms and people.
For a start, Virtu and KCG are part of a new breed of tech-savvy traders that have been taking over Wall Street in recent years.
North Island, a firm headed by former Nasdaq CEO Robert Greifeld and Glenn Hutchins, cofounder of private equity giant Silver Lake, is investing $US615 million in Virtu in partnership with GIC, Singapore’s sovereign wealth fund, and Public Sector Pension Investment Board (PSP Investments), one of Canada’s largest pension investment managers.
Centerview Partners, the New York-based boutique advisory firm led by Blair Effron, will advise North Island on its role in the deal. Greifeld and Hutchins will join Virtu’s newly formed 10-member Board of Directors immediately upon the deal’s close.
Temasek, a $US242 billion Singapore-based investor, is putting in an additional $US125 million in to Virtu shares.
JPMorgan is serving as the head advisor to Virtu for the deal, and has made a commitment to provide up to $US1.65 billion of debt financing for the transaction. Sandler O’Neill + Partners is also acting as a financial advisor to Virtu. Goldman Sachs is advising KCG meanwhile.
So, to recap, JPMorgan and Sandler O’Neill + Partners are advising Virtu on it’s acquisition of KCG, which is being advised by Goldman Sachs. A firm headed by Bob Greifeld and Glenn Hutchins is investing in Virtu in partnership with GIC and PSP Investments. Greifeld and Hutchins were advised by Centerview Partners. Oh, and Temasek is also buying in.
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