10th Oct 2007 07:01
ICAP PLC10 October 2007 Press Release ICAP agrees to acquire Traiana, Inc London and New York, 10 October, 2007 - ICAP plc (IAP.L), the world's premierinterdealer broker, has agreed to acquire all of the share capital of Traiana,Inc (Traiana). Traiana is a private company and a leading provider of automatedpost-trade processing services to financial institutions. The agreement isconditional on regulatory approval. The consideration for 100% of the share capital of Traiana is US$238 millionpayable in cash and $9 million of ICAP shares that will vest within four years.The acquisition of Traiana will be initially financed using a new acquisitionfacility on similar terms to ICAP's existing £350 million facility. For the year to 31 January 2008, Traiana's annual revenue is estimated to beUS$15 million (up 40% on 2007). As with other electronic businesses, Traiana ishighly operationally leveraged, with a high percentage of fixed costs. Theacquisition is expected to be adjusted earnings enhancing within three years andwill have an immaterial dilutive effect on ICAP's adjusted earnings per share inthe short term. Traiana provides global banks, broker/dealers, buy-side firms and e-tradingplatforms with solutions to automate post trade processing of financialtransactions. Its Harmony network is used by over 50 of the world's leadingbanks and has become the market standard for post-trade processing of FXtransactions. Traiana's technology is used to process tens of thousands of dealtickets every day and contributes to the orderly growth of the global financialmarkets. To date Traiana has invested $90 million to achieve critical mass inits markets. Traiana's business model is driven by the growth in the number of trades as eachtrade triggers multiple post trade events and Traiana charges for each event.Traiana has been very successful in operating as a neutral platform in theforeign exchange market and enjoys a great partnership with all the marketparticipants, including ICAP's EBS system. Traiana is committed to continuing towork closely with them all to support their businesses. This acquisition follows a number of very successful investments ICAP has madein post-trade services in recent years, including TriOptima in 2001 and Reset in2006. With the expansion of electronic and voice broking there has been anenormous increase in trading volumes. The market has absorbed hundreds of newparticipants from both emerging and developed markets through prime brokeragerelationships - this in turn has created a huge increase in the pressure onmiddle and back offices of the banks and other market participants. It isestimated that there are 500 million transactions annually in the OTC markets(ie excluding futures), which cost US$5 billion to process. Improving theefficiency of the whole process allows volumes to increase whilst removing riskand reducing costs to all market participants. Michael Spencer, Group Chief Executive of ICAP, commented "We are very pleasedto have reached agreement to acquire Traiana, the established market leader inthe automation of post trade processes in the OTC markets. Post trade services is an area where technology innovation is creating excitingnew business opportunities for ICAP and is an increasingly competitive necessityin growing market share in our broking business. More efficient post tradeprocessing increases the velocity of trading in our markets and facilitates theadoption of electronic trading. Traiana has shown very significant growth and we now expect this growth toaccelerate further, driven by a large increase in the number and size of bothmomentum and macro players and algorithmic trading in the OTC markets,especially foreign exchange. There are significant further opportunities toexpand and additional OTC products are being launched on the network." Gil Mandelzis, Traiana's Chief Executive Officer, commented "Traiana and ICAPshare a vision of providing comprehensive exchange-like post-trade services tothe OTC markets. By becoming part of ICAP, Traiana will be better able to serveour existing clients and platform partners and to more rapidly expand the rangeof post-trade services we provide. By working together we will give our clientsand the ability to grow even faster and to provide a higher level of service totheir clients." Following the acquisition, the senior management and founders of Traiana,including Gil Mandelzis, Chief Executive Officer, will remain with the business within theICAP Group. Gil Mandelzis will report to Mark Yallop, Group Chief Operating Officer of ICAPplc. There will be a conference call to brief investors and analysts at 09:00 BST on10 October 2007, for dial in details and a copy of the presentation pleasecontact Maitland on (44) 20 7379 5151. An audiocast of the presentation made toinvestors and analysts at 09:00 BST on 10 October 2007 will be available on theweb site, www.icap.com at 12:00 BST on 10 October 2007. It will remain on theweb site for six months. A further conference call will be held at 14:30 BST/09:30 EST for investors and analysts based in North America, for dial in detailsand a copy of the presentation please contact Maitland on (44) 20 7379 5151. Contacts: Michael Spencer Group Chief Executive (44) 20 7050 7400 Mike Sheard Director of Corporate Affairs (44) 20 7050 7103 Neil Bennett Maitland (44) 20 7379 5151 Michael Laven Chief Operating Officer, Traiana (1) 212 404 1714 About ICAP plc ICAP is the world's premier voice and electronic interdealer broker and thesource of global market information and commentary for professionals in theinternational financial markets. The Group is active in the wholesale markets ininterest rates, credit, commodities, foreign exchange and equity derivatives.ICAP has an average daily transaction volume in excess of $1.5 trillion, morethan 50 percent of which is electronic. ICAP plc was added to the FTSE 100 Indexon 30 June 2006. For more information go to www.icap.com About Traiana, Inc. Traiana provides global banks, broker/dealers, buy-side firms and e-tradingplatforms with straight through processing automation for post trade processesin the OTC markets. Traiana's Harmony network is used by over 50 of the world'sleading financial market participants and has become the market standard forpost-trade processing of foreign exchange transactions. The company has expandedit's product offering beyond foreign exchange into other asset classes includingprecious metals and credit derivatives. Traiana's solutions help to improverelationships between trading partners, reduce operational risk, and to lowercosts. Traiana is headquartered in New York City with offices in London and TelAviv. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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