EURONEXT announced acquisition of FastMatch for $153 million 

EURONEXT has issued a press release to announce acquisition of Fastmatch, an Electronic Communication Network (“ECN”) in the FX market and the expansion into Global FX Markets.

• Acquisition of FastMatch, Inc. (“FastMatch”) – the fastest growing Electronic Communication Network (“ECN”) in the spot Foreign Exchange (“FX”) market with leading-edge technology, entrepreneurial spirit and access to a large, transparent and diversified pool of liquidity at unrivalled speed andcapacity. After four years of consecutive growth, in Q2 to date FastMatch registered record ADV of $20.8 billion.

Key highlights of the transaction:

– Acquisition of a c.90% interest in FastMatch for initial cash consideration of $153 million at closing (on a debt-free cash-free basis), a contingent earn-out payment for an additional $10 million and customary minority rights for the management of FastMatch that will remain committed to the development of the business and stay invested with a c.10% interest.
– Fully financed acquisition through bank debt (pro-forma net leverage below 0.1x), transaction to maintain Euronext’s ability to pursue other external growth opportunities and will be immediately accretive to Euronext’s earnings.
– Subject to customary regulatory and anti-trust approvals and expected to close in Q3 2017.
– Enabling further growth potential through development in Europe, market data, and derivative products.

Transaction to strengthen Euronext’s product and geographic diversification and accelerate growth profile:

– Combining FastMatch’s leading-edge technology, entrepreneurial spirit and talent with Euronext’s network, brand, neutrality and industrypositioning.
– Consistent with Euronext’s “Agility for Growth” strategy: capturing opportunity arising from the environment, accelerating growth through bolt-on acquisitions, enhancing agility and strengthening core offering of servicing the real economy.

Euronext announces the acquisition of c.90% of FastMatch, Inc. for $153 million initial cash consideration. FastMatch’s management will remain invested with a c.10% interest, with minority rights. Closing is subject to regulatory and antitrust approvals, and is expected to occur in Q3 2017.

This exciting bolt-on acquisition is part of Euronext’s strategy to actively leverage our balance sheet flexibility to capture value accretive opportunities and to accelerate growth and diversification of our revenue base in line with our strategic plan ambitions. As such, the investment in FastMatch will not consume any resource dedicated to the deployment of our Agility for Growth initiatives (€100 to €150 million), which remains a key priority for Euronext.

This transaction establishes Euronext’s presence in the FX segment (the largest market globally), diversifies Euronext’s top line, accelerates its growth profile and allows the group to extend its “best execution” value proposition to an additional asset class. This transaction will meet Euronext’s key quantitative criteria as set out on 13 May 2016 at Investor Day (i.e., ROCE > WACC within year 3), and will be immediately EPS accretive without factoring in any synergies.

“The acquisition of FastMatch breaks new ground for Euronext, through expansion into the FX market which is the world’s largest traded asset class. This will broaden the spectrum of products we provide to capital market users, whilst meaningfully diversifying our revenue and creating long-term value and growth for customers and shareholders. The combination of FastMatch’s in depth FX expertise, leading technology platform, diverse customer base and entrepreneurial spirit with Euronext’s scale, strength and credibility, will position Euronext as a trustworthy infrastructure provider servicing a market where participants are increasingly looking for transparency, reduced capital costs, cutting-edge trading and long-term clearing solutions. The transaction is consistent with our disciplined approach to M&A and our Agility for Growth strategic plan announced on 13th May 2016, including our goal of attracting the best talent and entrepreneurs”, said Stéphane Boujnah, Chairman and CEO of the Managing Board of Euronext NV.

Dmitri Galinov, Founder and CEO of FastMatch commented: “We are very excited to become part of Euronext, an exchange group on the frontline of innovation and agility in the industry. Together, we will accelerate our vision of bringing transparency, best-in-class technology and execution to FX markets globally. Our superior technology will serve as catalyst to Euronext’s strategic ambitions in growing into the FICC in Europe.”

Source: EURONEXT – Euronext to acquire Fastmatch

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