LMAX Exchange has just announced a buy-back of the shares in the company owned by Paddy Power Betfair. The deal is valuing the institutional venue for foreign exchange trading at £70 million ($100 million). The transaction leads to a consolidation of ownership of LMAX Exchange into the hands of the management of the firm.
The transaction amounts to £21.95 million ($31.25 million) for the 31.35 percent stake of Paddy Power Betfair plc’s stake in LMAX. The equity purchase has been completed, resulting in the transfer of 187,811 shares to the group’s management team, which now owns 95 percent of the company.
The deal was financed by Silicon Valley Bank, which provides a senior debt facility. The official announcement does not elaborate on the terms of the deal.
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Commenting on the matter, the founder and CEO of LMAX Exchange Group, David Mercer, said: “I am very pleased to be working with Silicon Valley Bank. SVB’s focus on the innovation economy resonates perfectly with LMAX Exchange growth story and future ambition – this creates a solid foundation for our partnership going forward.”
“Having successfully built a global exchange marketplace for FX, our ambition is to continue growing our distribution and propagate the exchange execution model across capital markets. Using our proprietary and innovative exchange technology, we have led change in the FX industry by bringing in a new market structure, one that delivers complete transparency, open access and a level playing field for all market participants,” he added.
Mercer also highlighted that the company is posting record trading volumes.
The Director of Silicon Valley Bank’s corporate banking team, Rosh Wijayarathna, added: “We work with innovative businesses that are global by nature, so managing their FX exposure is an ever-important factor.”
“As the world gets smaller and the FX industry grows, the market is increasingly a focus for global regulators. LMAX Exchange is an impressive high-growth global business, which brings greater transparency to the FX industry through the exchange execution model, no ‘last look’ functionality and award-winning low latency technology. We are delighted to work with such an experienced management team and look forward to a continued partnership,” he concluded.