KCG to sell Hotspot to BATS Global Markets for $365m
Financial services provider KCG has agreed to sell its FX trading division, KCG Hotspot, to BATS Global Markets for $365m.
Under the agreement, which is expected to be completed in the second quarter of 2015, the two firms have also agreed to share certain tax benefits, which could see KCG receive additional payments of up to approximately $70m over the three year period following the completion of the deal.
"Hotspot is an innovative foreign exchange leader which will become an important part of our expanding global footprint, and we are excited to welcome their highly-regarded team to BATS Global Markets,” said BATS chief executive Joe Ratterman.
“Their FX expertise and reputation, along with our technology excellence and global presence, will make for a powerful combination and enable us to have a meaningful and significant impact on the direction of the FX market in the years to come."
Once the deal is completed, KCG said it expects the value of its tangible book to be increased by approximately $2 per share.
“The sale of Hotspot is expected to realize significant value for KCG's shareholders while simultaneously allowing us to continue to focus on the expansion of our global FX client market making business,” said Daniel Coleman, chief executive of KCG.
“Upon completion of the deal, our focus will be on putting the cash to good use for KCG and our shareholders."
KCG shares were up 2.51% to $12.27 at 15:46 on Wednesday.