CHICAGO, Oct. 16, 2020 /PRNewswire/ -- Cboe Global
Markets, Inc. (Cboe: CBOE), a market operator and global trading
solutions provider, today announced that it has entered into a
definitive agreement to acquire BIDS Trading, a registered
broker-dealer and the operator of the BIDS Alternative Trading
System (ATS), the largest block-trading ATS by volume1
in the U.S., subject to regulatory review and other customary
closing conditions.
![(PRNewsfoto/Cboe Global Markets, Inc.) (PRNewsfoto/Cboe Global Markets, Inc.)](https://mma.prnewswire.com/media/622233/Cboe_Logo.jpg)
The planned acquisition of BIDS Trading will provide an
opportunity for Cboe to diversify its U.S. equities offering beyond
traditional exchange products and services. BIDS Trading's proven
block trading capability will provide Cboe with a significant
foothold in the off-exchange segment of the U.S. equities market,
which now accounts for more than 40 percent of overall U.S.
equities trading volume. Working with BIDS Trading, Cboe has
already employed block trading to great effect in European equities
trading through Cboe LIS and ownership of BIDS Trading will provide
additional opportunities to expand Cboe's presence in North
American equities. Additionally, BIDS Trading's differentiated
network of global buy-side investment managers and sell-side
constituents provides the foundation for Cboe to potentially build
more off-exchange products and services in non-U.S. equities or
options products and in other geographies beyond the U.S.
"We are pleased to build upon our innovative and successful
partnership with BIDS Trading, which began with the 2016 launch of
Cboe LIS, now one of the largest European equities block trading
platforms," said Ed Tilly, Cboe
Global Markets Chairman, President and Chief Executive Officer.
"The acquisition complements our U.S. equities trading business by
expanding our presence into the off-exchange space. We are excited
by the opportunity to further diversify and expand our equities
trading offering and begin competing in this segment of the market.
I look forward to welcoming Tim and the BIDS Trading team to
Cboe."
Cboe and BIDS Trading began working together in 2016 to create
Cboe LIS, a European equities block trading venue that launched in
December of that year. Powered by BIDS technology, Cboe LIS has
grown into one of the largest block trading platforms in
Europe, with average daily volume
of approximately €240 million.
"The partnership Cboe and BIDS Trading have established in
Europe has been very successful
and we look forward to joining the Cboe Global Markets family,"
said Tim Mahoney, Chief Executive
Officer of BIDS Trading. "We believe joining the Cboe family will
enable us to pursue additional opportunities that are beneficial to
BIDS Trading Subscribers and Sponsored Users as Cboe continues to
expand its business across new geographies and reaches new
customers."
The transaction, which Cboe plans to fund with debt, is expected
to close in early 2021, subject to regulatory review and other
customary closing conditions. Terms of the deal were not disclosed,
however the company noted that the purchase price is not material
from a financial perspective. BIDS Trading generated approximately
$42 million in net revenue over the
last 12 months ending June 30, 2020
and is expected to be immediately accretive to the company's
earnings, contributing adjusted earnings per share of approximately
$0.05 - $0.06 in 2021. For additional background
information on BIDS Trading, see the slide deck available under
events and presentations on Cboe's Investor Relations website at
http://ir.cboe.com/events-and-presentations.
Cboe expects to maintain the BIDS ATS as an independently
managed and operated trading venue, separate from and not
integrated with the Cboe U.S. securities exchanges. BIDS Trading
Chief Executive Officer Tim Mahoney
is expected to remain in his current role and lead BIDS Trading as
an independent business within Cboe Global Markets, reporting into
an independent committee of the board of Cboe Global Markets.
BIDS Trading was established in 2006 and has grown to become the
largest independent block-trading ATS in the U.S., bringing
together counterparties to anonymously trade large blocks of
shares. BIDS Trading has a long history of deep and broad
relationships with buy-side clients. BIDS Trading is based on
a broker-neutral model and is open to sell-side firms and their
sponsored buy-side clients who can place orders directly into the
platform. The company's highly regarded software, BIDS Trader, has
extensive buy-side channel distribution via seamless integration
with buy-side traders' Order and Execution Management Systems
(OEMS).
Legal advisors to Cboe Global Markets on the transaction are
Davis Polk & Wardwell LLP and
WilmerHale, and financial advisors are Goldman Sachs & Co. LLC
and Centerview Partners LLC. Legal advisor to BIDS Trading is
Morgan, Lewis & Bockius LLP, with Broadhaven Securities, LLC
serving as financial advisor.
About Cboe Global Markets, Inc.
Cboe Global Markets (Cboe: CBOE) provides cutting-edge trading
and investment solutions to market participants around the world.
The company is committed to defining markets through product
innovation, leading edge technology and seamless trading
solutions.
The company offers trading across a diverse range of products in
multiple asset classes and geographies, including options, futures,
U.S., Canadian and European equities, exchange-traded products
(ETPs), global foreign exchange (FX) and volatility products based
on the Cboe Volatility Index (VIX Index), recognized as the world's
premier gauge of U.S. equity market volatility.
Cboe's subsidiaries include the largest options exchange and the
third largest stock exchange operator in the U.S. In addition, the
company operates one of the largest stock exchanges by value traded
in Europe, and owns EuroCCP, a
leading pan-European equities clearing house. Cboe also is a
leading market globally for ETP listings and
trading.
The company is headquartered in Chicago with a network of domestic and global
offices across the Americas, Europe and Asia, including main hubs in New York, London, Kansas
City and Amsterdam. For
more information, visit www.cboe.com.
About BIDS Trading
BIDS Trading, L.P. is a registered broker-dealer and the
operator of the BIDS Alternative Trading System (ATS), which was
designed to bring counterparties together to anonymously trade
large blocks of shares. Developed by a consortium of leading
financial services firms, the BIDS ATS resolves the classic paradox
of the block trader – the need to find legitimate trading
counterparties without prematurely revealing trading intentions.
The BIDS ATS is open to all qualifying broker-dealers and their
institutional clients, subject to basic credit and regulatory
requirements. For more information, visit www.bidstrading.com.
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Media
Contacts
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Analyst
Contact
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Angela
Tu
+1-646-856-8734
atu@cboe.com
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Tim
Cave
+44 (0)
7593-506-719
tcave@cboe.com
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Debbie
Koopman
+1-312-786-7136
koopman@cboe.com
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CBOE-C
CBOE-E
CBOE-OE
Cboe®, Cboe Global Markets®, Cboe Volatility Index®, and VIX®
are registered trademarks of Cboe Exchange, Inc. BIDS
Trading® is a registered trademark of BIDS Holdings, L.P. All other
trademarks and service marks are the property of their respective
owners.
This press release includes accretion in our expected adjusted
EPS, a non-GAAP financial measure, that excludes certain items we
do not consider reflective of our cash operations and core business
performance. In particular, expected adjusted EPS accretion for the
BIDS Trading acquisition for the twelve months ended December 31, 2021 is adjusted to deduct
approximately $5 million pre-tax in
estimated amortization of intangibles. We believe that the
presentation of this non-GAAP measure provides investors with
greater transparency and supplemental data relating to our
financial condition and results of operations. This adjusted
non-GAAP measure should be considered in context with our GAAP
results.
Specific quantifications of the amounts that would be required
to reconcile expected accretion in adjusted EPS to the most
comparable GAAP metric are not available. The company believes that
there is uncertainty and unpredictability with respect to the most
comparable GAAP measure, which preclude the company from providing
an accurate reconciliation. The company believes that providing
estimates of the amounts that would be required to reconcile the
adjusted EPS would imply a degree of precision that would be
confusing or misleading to investors for the reasons identified
above.
Cautionary Statements Regarding Forward-Looking
Information
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
that involve a number of risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "might,"
"should," "expect," "plan," "anticipate," "believe," "estimate,"
"predict," "potential" or "continue," and the negative of these
terms and other comparable terminology. All statements that reflect
our expectations, assumptions or projections about the future other
than statements of historical fact are forward-looking statements.
These forward-looking statements, which are subject to known and
unknown risks, uncertainties and assumptions about us, may include
projections of our future financial performance based on our growth
strategies and anticipated trends in our business. These statements
are only predictions based on our current expectations and
projections about future events. There are important factors that
could cause our actual results, level of activity, performance or
achievements to differ materially from those expressed or implied
by the forward-looking statements.
We operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time,
and it is not possible to predict all risks and uncertainties, nor
can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements.
Some factors that could cause actual results to differ include:
the impact of the novel coronavirus ("COVID-19") pandemic,
including changes to trading behavior broadly in the market; the
loss of our right to exclusively list and trade certain index
options and futures products; economic, political and market
conditions; compliance with legal and regulatory obligations; price
competition and consolidation in our industry; decreases in trading
or clearing volumes, market data fees or a shift in the
mix of products traded on our exchanges; legislative or regulatory
changes; our ability to protect our systems and communication
networks from security risks, cybersecurity risks, insider threats
and unauthorized disclosure of confidential information; increasing
competition by foreign and domestic entities; our dependence on and
exposure to risk from third parties; fluctuations to currency
exchange rates; our index providers' ability to maintain the
quality and integrity of their indexes and to perform under our
agreements; our ability to operate our business without violating
the intellectual property rights of others and the costs associated
with protecting our intellectual property rights; our ability to
attract and retain skilled management and other personnel; our
ability to minimize the risks, including our credit and default
risks, associated with operating a European clearinghouse; our
ability to accommodate trading volume and transaction traffic,
including significant increases, without failure or degradation of
performance of our systems; misconduct by those who use our markets
or our products; challenges to our use of open source software
code; our ability to meet our compliance obligations, including
managing potential conflicts between our regulatory
responsibilities and our for-profit status; damage to our
reputation; the ability of our compliance and risk management
methods to effectively monitor and manage our risks; our ability to
manage our growth and strategic acquisitions or alliances
effectively; restrictions imposed by our debt obligations; our
ability to maintain an investment grade credit rating; impairment
of our goodwill, long-lived assets, investments or intangible
assets; and the accuracy of our estimates and expectations. More
detailed information about factors that may affect our actual
results to differ may be found in our filings with the SEC,
including in our Annual Report on Form 10-K for the year ended
December 31, 2019 and other filings
made from time to time with the SEC.
We do not undertake, and we expressly disclaim, any duty to
update any forward-looking statement whether as a result of new
information, future events or otherwise, except as required by law.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof.
1 A block is defined as 10,000+ shares;
Source: FINRA, please see FINRA website for
complete data.
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SOURCE Cboe Global Markets, Inc.