R.J. O’Brien Europe Limited (RJO Europe), an affiliate of R.J. O’Brien & Associates (RJO), the largest independent futures brokerage and eolearing firm in the US, has acquired GFI Group’s (NYSE:GFIG) subsidiary, Kyte Group Limited, according to a recent R.J. O’Brien statement.
Late last month, GFI Group made waves when BGC Partners acquired 56.3% of its group shares for $6.10 per RSU. The tender offer was completed as of February 27, 2015, putting an end to a lengthy takeover duel dubbed as the “alphabet battle” (since the CME Group entered into competition for control of part of the company partnering with GFI’s management).
GFI Group is an intermediary and trading-technologies provider for OTC and listed markets. Despite the recent deal between GFI and BGC that lingered on for some time, its subsidiary, BGC Partners, had made it apparent that they were not interested in Kyte Group.
Kyte Group is a large derivatives clearing agent in Europe, dealing in risk management, trade settlement and exchange connectivity via direct market access (DMA) to proprietary traders, brokers and market makers. The transaction between RJO Europe and GFI was approved by the UK’s Financial Conduct Authority (FCA) and is targeting a concluding date of March 17. Upon closing of the transaction, Kyte Group will operate under the name R.J. O’Brien Ltd.
Executive Restructuring & Emphasis
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In addition to the name change, RJO Europe’s management structure will also be changing, with David Mudie, CEO of RJO Europe’s subsidiary R.J. O’Brien (UK), being appointed as the CEO of RJO Obrien Ltd. Moreover Kyte Group veteran Thomas Texier will be leading operations at both RJO UK subsidiaries. The moves follow last week’s appointment of Jamal Oulhadj as COO at R.J. O’Brien.
According to Gerald F. Corcoran, chairman and chief executive officer of RJO, in a recent statement on the transaction, “We’ve made a strategic decision to expand significantly in the UK and Europe, and we are truly thrilled to bring Kyte’s impressive operation and talented team of high-caliber, seasoned employees into the RJO family. We also look forward to getting to know the great clients of Kyte, who will continue to experience the high level of service offered by both RJO and Kyte, along with new access and capabilities that we can now provide.”
“The acquisition will immediately add value, enabling us to accelerate our growth plans and to benefit from robust infrastructure enhancements in Europe that would have taken us several years to build from the ground up. This move will help us further capitalize on our recent success in the EMEA region, where David has forged a strong team and greatly enhanced our institutional reach,” added Mr. Corcoran.
“We have reflected on our position across GFI’s various business lines and decided Kyte is not part of our long-term strategic plan. This transaction better enables GFI to focus on our leading wholesale financial brokerage, software and market data businesses. Going forward, we expect to become a more focused and efficient company as we work on reducing costs by integrating our back office and technology functions with those of our parent company, BGC Partners. As this integration progresses, we believe that GFI will be in an even stronger position to provide world-class wholesale brokerage and technology solutions to our global customer base,” noted Colin Heffron, CEO of GFI in an accompanying statement.
Finally, David Mudie reiterated, “We see tremendous synergies between the two organisations, and this is a fantastic opportunity for our respective clients and staff. We have a shared commitment to superior client service and strong relationships, and clients can expect continuity of service throughout and after the integration. In addition to the many mutual benefits, Kyte clients can enjoy RJO’s vast reach, global clearing arrangements, extensive operations in North America as well as Asia, and 100-year history of excellence in the futures markets.”