Chicago-based exchange holding company, Cboe Global Markets, today announced it has entered into a definitive agreement to acquire the MATCHNow dark pool for Canadian equities from Virtu Financial.
The transaction, which Cboe plans to fund with cash on hand, is expected to close in the third quarter of 2020, subject to regulatory approvals and other customary closing conditions.
Cboe said that upon successful completion of this acquisition, it will gain a foothold in a key capital market new to the company, while expanding the geographic presence and diversifying the product capabilities of its North American equities business.
Establishing a presence in Canada
Ownership of MATCHNow is also expected to provide Cboe with a strategic pathway to build towards a comprehensive equities platform for the Canadian markets and potentially establish a significant presence in the region.
MATCHNow is Canada’s largest broker-neutral dark pool, accounting for nearly 65 percent market share in total Canadian dark trading, or approximately 7 percent in total Canadian equities volume.
Canada is one of the world’s leading equities markets, where Cboe sees further growth potential driven by off-exchange trading, the recent opening of the market to multi-venue competition and overall robust economic growth.
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Cboe has a proven track record in integrating and growing acquisitions. The firm plans to invest in MATCHNow’s growth, and deploy MATCHNow’s innovative products, solutions and industry expertise to serve Canadian equity markets and investors. 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.
An innovative equities platform
“MATCHNow offers an innovative equities platform, pioneering spirit and customer-first approach that are complementary with Cboe’s equities business. This is a highly strategic acquisition that enables us to expand into a new key geography, and strengthens our position as a global leader in providing innovative solutions and technology to enhance our customers’ trading experience. With our U.S. and European presence covering many of the world’s largest equities marketplaces, we are excited to enter the Canadian market,” Ed Tilly, chairman, president and CEO of Cboe Global Markets, said in a statement.
“Cboe will bring an innovative mindset, economies of scale, market expertise and client distribution that can further propel MATCHNow’s growth and inject robust competition into the Canadian marketplace. The Cboe team has a history of developing equities markets and we look forward to enhancing our capabilities further by leveraging Cboe’s core strengths as a leading global exchange operator,” Bryan Blake, CEO of MATCHNow, noted.
Offering enhanced execution for institutional, retail and proprietary order flow, MATCHNow combines frequent call matches and continuous execution opportunities in a fully confidential trading book.
It is also a top provider of Conditional Orders, a product that is seeing growing adoption in Canada and could become a meaningful contributor to MATCHNow’s volume growth.