Virtu Financial has agreed to acquire Investment Technology Group (ITG), a US-based agency brokerage and financial markets technology firm, for a deal worth around $1bn.
As per the terms of the all-cash deal, Virtu Financial will pay $30.30 for each share of ITG, which helps brokers and asset managers boost returns for investors across the world.
On the other hand, Virtu Financial, which is also headquartered in New York, is a high-frequency trading (HFT) and market making firm that uses technology to deliver liquidity to the global markets in addition to providing transparent trading solutions to its clients.
ITG board of directors chairman Minder Cheng said: “After careful consideration, ITG’s Board of Directors determined that the proposal from Virtu, which provides an immediate and significant cash premium, offers the most value for ITG stockholders.
“The combination of Virtu and ITG will create an industry-leading financial technology franchise with true global capabilities and scale.”
Virtu Financial said that the acquisition of ITG is a natural next step in its growth by giving its clients access to a comprehensive suite of agency services. Included in these services are transparent trading and workflow technology, analytics, and liquidity solutions.
The acquisition of ITG in addition to giving improved client experience, will also offer a considerable amount of additional scale and financial benefits, said the high-frequency trading firm.
Currently, ITG provides execution services in more than 50 countries through its offices located across Asia Pacific, Europe and North America.
Virtu Financial CEO Douglas Cifu said: “ITG has built a first-class global institutional client franchise with incredible people that will benefit from this strategic combination. We are fully committed to growing and improving the complete agency execution offering that ITG’s clients use every day – Liquidity, Execution Services, Workflow Technology and Analytics.
“This combination will leverage Virtu’s financial technology – the same technology that drives our market making performance – to optimize all aspects of the business, from order routing and algo performance to middle- and back-office efficiency.”
The deal will be subject to customary closing conditions such as the approval of the stockholders of ITG, and receipt of mandated regulatory clearances and approvals.