- Planned transaction builds on Cboe's footprint in North America, adding a registered Canadian
securities exchange with diverse product set
- Next step in Cboe's pursuit to build one of the world's largest
global securities and derivatives trading networks to service
diverse customer needs
- Deal is expected to close in the first half of 2022, pending
regulatory review
CHICAGO, Nov. 15, 2021 /PRNewswire/ -- Cboe Global
Markets, Inc. (Cboe: CBOE), a leading provider of global market
infrastructure and tradable products, today announced it has
entered into a definitive agreement to acquire Aequitas
Innovations, Inc., more commonly known as NEO1, a
fintech organization that comprises of a fully registered Tier-1
Canadian securities exchange with a diverse product and services
set ranging from corporate listings to cash equity
trading.
Ownership of NEO will help allow Cboe to provide a more fulsome
Canadian equities offering, operating the NEO Exchange, a national
securities exchange with trading, listings and other services, in
addition to MATCHNow, the alternative trading system (ATS) acquired
by Cboe in 2020. This strengthened offering is expected to drive
more trading activity on Cboe markets and improve efficiencies and
opportunities for investors and capital-raisers in both
Canada and the U.S.
Fully operational since 2015, the NEO Exchange is a Toronto-based Canadian stock exchange operator
with business lines across listings, trading and market data. Its
sister company, NEO Connect, provides a distribution platform
supporting mutual funds, private funds and private corporates. With
ownership of the MATCHNow and NEO businesses, Cboe will be able to
provide a comprehensive equities platform for the Canadian markets
with over 16.5% combined market share expected at
close2, market data feeds, access services, listings and
distribution services for non-listed securities.
Ed Tilly, Chairman, President and
CEO of Cboe Global Markets, said: "Adding NEO to the Cboe network
better enables us to create a first-class equities offering in
Canada, bolstering our global
markets in North America,
Europe and Asia Pacific, and bringing us one step closer
to our vision of building one of the world's largest global
derivatives and securities trading networks. With MATCHNow and NEO,
Cboe can achieve scale in Canada,
creating efficiencies for our combined customers with familiar
technology and consistent market models. I look forward to working
with the entire NEO team, whose innovative spirit, customer-first
approach and drive for change will not only help us grow the NEO
business, but also bring greater choice to market participants in
Canada and across the globe."
NEO has built a unique and exciting corporate listings offering
for Canadian companies focused on the innovation economy. With NEO,
Cboe plans to evaluate a potential expansion of its successful
listings business into other geographies as it explores
opportunities to power the success of these Canadian companies
internationally through global capital raising opportunities.
Jos Schmitt, President and CEO of NEO, said: "We are
excited to draw upon Cboe's core strengths as a leading global
market infrastructure provider to further develop innovative
solutions that meet the needs of investors and capital-raisers
around the world. Our commitment to innovation, fairness and
putting investors and capital-raisers first will not only continue
under Cboe's ownership, but now benefit from the strength and
support of Cboe's technology, market expertise and global client
distribution."
Cboe has a proven track record in integrating and growing
acquisitions. It plans to support NEO's growth, and deploy NEO's
innovative market models, solutions and industry expertise to serve
Canadian equity markets and global investors and issuers. The
transaction reflects Cboe's broader growth strategy, which includes
targeting acquisitions that have the potential to accelerate its
geographic and asset class presence, while deepening its customer
reach.
NEO operates a next generation stock exchange, the NEO Exchange,
focused on fairness, liquidity, transparency and efficiency that
brings together investors and capital-raisers, serving as a central
force driving the Canadian capital markets forward. As the second
most active stock exchange in Canada, the NEO Exchange provides three market
models: NEO-L, a make-take model, NEO-N, an inverted model, and
NEO-D, a darkpool. It also offers a robust corporate, exchange
traded product (ETP) and Canadian Depository Receipt (CDR) listings
business and real-time market data services. NEO also operates a
distribution platform for unlisted securities, NEO Connect, and an
automated workflow supporting private placements via DealSquare, a
NEO Connect partner.
The transaction, which Cboe plans to fund with cash on
hand, supplemented by increased debt, if needed, is expected
to close in the first half of 2022, 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 and expects it to be
nominally accretive.
Legal advisors to Cboe Global Markets on the transaction are
Blake, Cassels & Graydon LLP, with TD Securities, Inc. serving
as financial advisor.
About Cboe Global Markets, Inc.
Cboe Global Markets (Cboe: CBOE), a leading provider of market
infrastructure and tradable products, delivers cutting-edge
trading, clearing and investment solutions to market participants
around the world. The company is committed to operating a trusted,
inclusive global marketplace, providing leading products,
technology and data solutions that enable participants to define a
sustainable financial future. Cboe provides trading solutions and
products in multiple asset classes, including equities, derivatives
and FX, across North America,
Europe and Asia Pacific. To learn more, visit
www.cboe.com.
About NEO
NEO is a bold and disruptive capital markets fintech company
designed for and led by the industry to enable change for the
better. NEO consists of the NEO Exchange, Canada's Tier 1 stock exchange for the
innovation economy that brings together investors and capital
raisers within a fair, efficient, and service-oriented environment;
and NEO Connect, a multi-asset distribution platform supporting
mutual funds, private funds, and private placements for
corporates.
CBOE-C
CBOE-OE
Cboe®, Cboe Global Markets®, Cboe Volatility Index®, and VIX®
are registered trademarks of Cboe Exchange, Inc. All other
trademarks and service marks are the property of their respective
owners.
Cboe Media
Contact
|
NEO Media
Contact
|
|
Cboe Analyst
Contact
|
Angela
Tu
|
Joanne
Kearney
|
|
Kenneth Hill,
CFA
|
+1-646-856-8734
|
+1-416-804-5949
|
|
+1-312-786-7559
|
atu@cboe.com
|
joanne.kearney@smithcom.ca
|
|
khill@cboe.com
|
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 satisfaction of the conditions precedent to the consummation of
the proposed transaction, including, without limitation, the
receipt of regulatory approvals on the terms desired or
anticipated; 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
or changes in tax regimes; 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; factors that
impact the quality and integrity of our indices; 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 and clearing 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 or for whom we clear transactions; 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;
our ability to maintain BIDS Trading as an independently managed
and operated trading venue, separate from and not integrated with
our registered national securities exchanges; 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 and our
ability to make payments on or refinance 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, 2020 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 Neo is the aggregate business name for Aequitas
Innovations, Neo Exchange and Neo Connect
2 Source: Investment Industry Regulatory Organization of
Canada (IIROC) reports of market
share by marketplace through September 30,
2021.
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