KCG Acquires Neonet Securities, Enhancing its European Presence

The deal expands to KCG's European presence via increased execution services and capabilities.

KCG Holdings, Inc. (NYSE: KCG) has moved to acquire Neonet Securities AB, a Stockholm-based independent agency broker and execution specialist, in a move to help broaden its European focus, according to a company statement.

Neonet is a provider of advanced algorithmic trading, smart order routing, and sales trading primarily across the European equities space. The acquisition by KCG will help enable clients from the group and Neonet to support greater access to a more complete composite of international execution services and capabilities. In particular, this will emphasize KCG’s latitude on the European continent, with a focus on equities and execution services to banks, brokers, and other financial institutions.

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The transaction itself is pending requisite regulatory conditions, though the terms of the deal were not presently disclosed. The acquisition also needs to be approved by shareholders of Neonet.

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No Management Shakeup Following Acquisition

Per the acquisition, Neonet will continue to be led by its CEO Tim Wildenberg – additionally, Neonet will be based out of Stockholm regardless of the closing of the deal. The deal is also important for KCG as it’s expected to yield significant cost savings via consolidating exchange memberships, market data, routing and other operational costs.

According to Philip Allison, CEO of KCG Europe Limited, in a recent statement on the deal: “We are pleased to announce an agreement to acquire Neonet, a Nordic pioneer in trading and execution services, as we broaden our European reach and continue to bolster our ability to provide clients with global execution solutions.”

“Neonet’s sophisticated technology, experienced trading desks, and deep team of execution specialists are highly complementary to our existing execution services and will help accelerate the growth of our agency client business,” he added.

“We are excited to join forces with KCG, an established market leader in global execution services. We look forward to leveraging KCG’s significant expertise across asset classes in the U.S. and Europe for the benefit of our clients worldwide for years to come,” reiterated Mr. Wildenberg, in an accompanying statement.

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