- Through ownership of BIDS Trading, Cboe gains a foothold in
the off-exchange segment of the U.S. equities market
- BIDS Trading to operate as an independently managed trading
venue separate from the Cboe U.S. securities exchanges
- Acquisition follows successful partnership between Cboe and
BIDS Trading, which began in 2016 with the launch of Cboe LIS, now
one of the largest block trading platforms in Europe
- Acquisition also provides opportunity for Cboe to expand its
global footprint and diversify its product and service offerings in
markets beyond U.S. equities and options
CHICAGO, Jan. 4, 2021 /PRNewswire/ -- Cboe Global
Markets, Inc. (Cboe: CBOE), a market operator and global trading
solutions provider, today announced it has completed its
acquisition of 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.
Through ownership of BIDS Trading, Cboe gains a competitive
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. The acquisition of BIDS Trading also
provides Cboe with the opportunity to expand its global footprint
and diversify its product and service offerings in markets beyond
U.S. equities and options.
The acquisition follows Cboe and BIDS Trading's successful
partnership in Europe, which began
in 2016 with the creation of Cboe LIS for European equities block
trading. Since its launch, Cboe LIS has grown to become one of the
largest block trading platforms in Europe, accounting for approximately €240
million in average daily volume.
Cboe Global Markets Chairman, President and CEO Ed Tilly said: "Through our successful
collaboration on Cboe LIS, Cboe and BIDS Trading have established a
proven track record in delivering best-in-class block trading
capabilities for European equities. We are excited to have Cboe's
reach extend into the off-exchange segment of the U.S. equity
markets through its ownership of BIDS Trading, and to broaden our
ability to potentially expand into other asset classes and
geographies as well. I am pleased to welcome the entire BIDS
Trading team to Cboe."
Cboe will 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 will
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 CEO Tim Mahoney
said: "We have had a long and fruitful relationship with Cboe and
have achieved remarkable success with Cboe LIS in Europe and we are excited by the additional
opportunities and benefits that this acquisition could bring to
BIDS Trading subscribers and sponsored users. We look forward to
becoming a part of the Cboe Global Markets family and continuing to
build on our history of successful innovation."
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 $41 million in net revenue over the last 12
months ending September 30, 2020.
Cboe also reiterated that it expects the acquisition of BIDS
Trading to be immediately accretive to the company's earnings,
contributing adjusted earnings per share of approximately
$0.05 - $0.06 in 2021.
Legal advisors to Cboe Global Markets on the transaction were
Davis Polk & Wardwell LLP and
WilmerHale, and financial advisors were Goldman Sachs & Co. LLC
and Centerview Partners LLC. Legal advisors to BIDS Trading were
Morgan, Lewis & Bockius LLP and Willkie
Farr & Gallagher LLP, with Broadhaven Securities, LLC
serving as financial advisor.
For additional information on BIDS Trading, visit:
https://www.bidstrading.com/.
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.
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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