The operator of electronic trading platform for fixed-income securities, MarketAxess Holdings Inc. announced this Tuesday that it has entered into an agreement to acquire LiquidityEdge, a provider of an electronic US Treasuries marketplace.
The transaction is valued at $150 million. This includes $100 million in cash and $50 million in MKTX stock, subject to customary purchase price adjustments, the statement released today said.
LiquidityEdge was established in 2015 and offers a bespoke trading ecosystem which connects dealers, market-makers, and institutional investors to trade in the US Treasury market.
Commenting on the acquisition, Chris Concannon, President and Chief Operating Officer of MarketAxess, said: “Through the acquisition of LiquidityEdge, we are bringing rates trading capabilities to MarketAxess to complement our leading position of electronic trading in the global credit markets.”
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“This will not only enhance the trading experience for our dealer and institutional investor clients, but also offer a truly innovative solution for dealers to stream U.S. Treasury quotes to a tailored audience.”
MarketAxess to expand hedging capabilities
The transaction is expected to close in the final quarter of this year, subject to regulatory approvals. In conjunction with the acquisition announcement, MarketAxess will also be expanding its hedging capabilities to include Treasuring hedging for its credit products.
The initial phase of this new service is expected to launch in the fourth quarter of 2019, the same period when the acquisition is planned to be completed.
“Across a few short years, LiquidityEdge has grown to become one of the leading marketplaces to trade U.S. Treasuries. Offering an alternative to incumbent trading protocols, LiquidityEdge continues to record daily highs in excess of $25 billion,” added Nichola Hunter, Chief Executive Officer of LiquidityEdge.
“That tremendous growth is made possible by our cutting-edge approach to liquidity management and superior technology solutions, something also shared by MarketAxess. MarketAxess has been a true pioneer in driving the evolution of the fixed income markets, and we’re thrilled that LiquidityEdge will add to that story.”