Nasdaq OMX has inked an agreement with BGC Partners to acquire the eSpeed platform for $750m in cash as well as certain conditional issuances of stock, which will enable it to enter into the electronic fixed income business.
Based on the current stock price, the acquirer will issue nearly one million shares annually over 15 years and the company will fund the purchase price with cash on hand and in the long-term debt markets.
The exchange group said that the acquisition will offer more exposure to fixed income markets, which remains one of the largest and most liquid cash markets in the world.
The acquired enterprise, which manages a completely executable central limit order book for electronic trading in US Treasuries, will allow Nasdaq to provide increased access to fixed income products as well as an array of trading instruments to its customers.
Nasdaq OMX chief executive officer Bob Greifeld said that the company is creating a diverse, customer-centric portfolio of corporate, trading, technology and information solutions.
"The acquisition furthers our stated diversification strategy, and strengthens our commitment to deliver significant value to shareholders," Greifeld added.
On completion of the acquisition, the acquired entity will operate as a part of the Nasdaq OMX Transaction Services business, which delivers marketplaces in equities, derivatives, exchange traded products and commodities.
The acquirer said that the deal will also diversify Nasdaq OMX Transaction Services and enables the company to maximize new opportunities in the trading of fixed income securities around the globe.
Pending receipt of various regulatory approvals and satisfying customary closing conditions, the transaction is likely to conclude during June 2013.
Deutsche Bank has been serving as financial advisor to Nasdaq OMX.
Nasdaq OMX manages and operates 24 markets, 3 clearinghouses and 5 central securities depositories supporting equities, options, fixed income, derivatives, commodities, futures and structured products in the US and Europe.