TP ICAP Confirms Axiom Acquisition, Reports Revenue Stagnation

TP ICAP, the largest interdealer broker in the world, on Friday confirmed rumors that it has acquired Axiom Commodity Group, a US-based energy and commodities brokerage firm. The initial payment for the acquisition is $15.1 million in cash.

According to the regulatory filing, a further $3.1 million will be paid over three years and, depending on the performance of the business over this time frame, an extra $10.9 million will also be paid to the commodities broker.

Following the acquisition, Axiom will become part of TP ICAP's Energy & Commodities division. As reported by Finance Magnates earlier this week, Axiom has a large presence in natural gas, petroleum, power, biofuels, and grains markets, allowing TP ICAP to expand its footprint in these markets.

TP ICAP Reports Stagnant Revenues

As we previously reported, it was largely expected that the announcement of the deal would coincide with TP ICAP revealing its financial results for the four months ended October 31, 2018, which the firm also published today.

During this four-month period, revenue was flat, coming in at £568 million ($739.8 million), up one percent from the revenue of £562 million experienced in the same time period last year. Year to date (January to October), the firm achieved revenue of £1.478 billion. This is down by one percent year-on-year from £1.487 billion, but up 3 percent at constant exchange rates.

According to the statement, the flat revenue is a reflection of mixed market conditions during the period. Global Broking revenue was in line with the prior year, with both rates and equities performing well. Revenue for energy and commodities also came in around the same value as the four months ended October 31, 2017. The company's Data & Analytics business, on the other hand, saw strong revenue growth in the period of 11 percent.

Commenting on the results, Nicolas Breteau, the Chief Executive of TP ICAP plc, said: "today's trading update demonstrates that TP ICAP is well placed to grow in mixed market conditions, characterised by periodic Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term that we saw in October following the US Federal Reserve's rates decision."

“This underlines our firmly-held belief that investing in growth areas such as Data & Analytics Analytics Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision-making. In the trading space, analytics are applied in a predictive manner in an attempt to forecast the price more accurately. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analy Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision-making. In the trading space, analytics are applied in a predictive manner in an attempt to forecast the price more accurately. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analy Read this Term will benefit TP ICAP over the longer-term as we develop solid and scalable revenues across our global businesses."

“I am also pleased to announce the acquisition of Axiom Commodity Group, an energy and commodities broker based in the US. The purchase of Axiom, which has 22 brokers and specialises in crude oil, refined oil products, ethanol and physical grains, continues the expansion of our Energy & Commodities division and reinforces our existing presence in Houston, Texas."