Tradeweb Wants to Buy Yieldbroker for AUD 125 Million

Thursday, 27/04/2023 | 08:58 GMT by Damian Chmiel
  • There is no guarantee that the deal will be finalized.
  • 43% of Yieldbroker is owned by the Australian exchange operator, ASX.
Tradeweb
Billy Hult, the CEO of Tradeweb

Tradeweb Markets (NASDAQ: TW), a publicly-listed operator of electronic marketplaces for money markets, announced on Thursday that it is in advanced talks to acquire Yieldbroker, an Australian government bond and interest rate derivatives trading platform . Tradeweb anticipates that the transaction could be finalized for AUD 125 million.

Tradeweb Wants to Buy Yieldbroker

According to Tradeweb, the acquisition would combine the two firms' industry experience and trading solutions to create more transparent, liquid fixed-income markets. Additionally, the deal would enable Yieldbroker's domestic clients to access the global multi-asset platform provided by Tradeweb. In addition, Tradeweb's clientele would gain access to pre-trade transparency, enhanced liquidity and broader coverage of the debt capital markets in Australia and New Zealand.

Billy Hult, the CEO of Tradeweb
Billy Hult, the CEO of Tradeweb

"Australia is home to the 5th largest pension fund market globally, and we believe that this would help grow Tradeweb's Asia Pacific footprint and provide meaningful opportunities for domestic and global clients," Tradeweb commented in the written statement.

However, Tradeweb cautioned that there was no guarantee that a definitive agreement would be reached or that the transaction would be completed. The deal is still subject to Yieldbroker's stockholder approval, final definitive documentation, and regulatory reviews.

ASX Comments on Proposed Sale

The Australian Securities Exchange (ASX), the largest Australian stock exchange with a history dating back to 1871, currently owns about 43% of Yieldbroker, with the remaining shares held by domestic and foreign banks as well as platform employees. In this regard, ASX issued a separate comment on Thursday regarding the potential acquisition , stating that it would be conducted "on a cash-free, debt-free basis and assuming a normalized level of working capital."

"The Proposed Transaction has been unanimously recommended to Yieldbroker shareholders by the Yieldbroker board. Approval of Yieldbroker shareholders is being sought to meet certain Yieldbroker constitutional requirements," ASX wrote.

The value of ASX shares under the terms of the transaction is approximately AUD 55 million, including transaction costs. The current book value of ASX's interest in Yieldbroker is around AUD 30 million. ASX stated that its participation in the transaction is subject to the decision of the Board of Directors.

Tradeweb Reports 23rd Consecutive Year of Revenue Growth

In February, Tradeweb reported $293 million in revenue for the fourth quarter of 2022. The figure jumped 5.8 percent year-over-year. Further, the company witnessed a massive uptick of 65 percent in its quarterly net income, which came in at $99 million. It was boosted by a lower tax expense related to changes in our deferred tax assets and an increase in interest income. On the other hand, the adjusted income increased by 17.2 percent to $116.9 million.

"Tradeweb reported its 23rd consecutive year of revenue growth in 2022," Billy Hult, the CEO of Tradeweb, said.

Also, Tradeweb generated a full-year ADV (average daily volume) of $1.1 trillion in 2022. This represents a growth of 9.87% year-over-year (YoY).

In the most recent update, the company presented a new market data service allowing real-time calculation of Indicative Net Asset Values (iNAVs) for exchange-traded funds (ETFs).

Tradeweb Markets (NASDAQ: TW), a publicly-listed operator of electronic marketplaces for money markets, announced on Thursday that it is in advanced talks to acquire Yieldbroker, an Australian government bond and interest rate derivatives trading platform . Tradeweb anticipates that the transaction could be finalized for AUD 125 million.

Tradeweb Wants to Buy Yieldbroker

According to Tradeweb, the acquisition would combine the two firms' industry experience and trading solutions to create more transparent, liquid fixed-income markets. Additionally, the deal would enable Yieldbroker's domestic clients to access the global multi-asset platform provided by Tradeweb. In addition, Tradeweb's clientele would gain access to pre-trade transparency, enhanced liquidity and broader coverage of the debt capital markets in Australia and New Zealand.

Billy Hult, the CEO of Tradeweb
Billy Hult, the CEO of Tradeweb

"Australia is home to the 5th largest pension fund market globally, and we believe that this would help grow Tradeweb's Asia Pacific footprint and provide meaningful opportunities for domestic and global clients," Tradeweb commented in the written statement.

However, Tradeweb cautioned that there was no guarantee that a definitive agreement would be reached or that the transaction would be completed. The deal is still subject to Yieldbroker's stockholder approval, final definitive documentation, and regulatory reviews.

ASX Comments on Proposed Sale

The Australian Securities Exchange (ASX), the largest Australian stock exchange with a history dating back to 1871, currently owns about 43% of Yieldbroker, with the remaining shares held by domestic and foreign banks as well as platform employees. In this regard, ASX issued a separate comment on Thursday regarding the potential acquisition , stating that it would be conducted "on a cash-free, debt-free basis and assuming a normalized level of working capital."

"The Proposed Transaction has been unanimously recommended to Yieldbroker shareholders by the Yieldbroker board. Approval of Yieldbroker shareholders is being sought to meet certain Yieldbroker constitutional requirements," ASX wrote.

The value of ASX shares under the terms of the transaction is approximately AUD 55 million, including transaction costs. The current book value of ASX's interest in Yieldbroker is around AUD 30 million. ASX stated that its participation in the transaction is subject to the decision of the Board of Directors.

Tradeweb Reports 23rd Consecutive Year of Revenue Growth

In February, Tradeweb reported $293 million in revenue for the fourth quarter of 2022. The figure jumped 5.8 percent year-over-year. Further, the company witnessed a massive uptick of 65 percent in its quarterly net income, which came in at $99 million. It was boosted by a lower tax expense related to changes in our deferred tax assets and an increase in interest income. On the other hand, the adjusted income increased by 17.2 percent to $116.9 million.

"Tradeweb reported its 23rd consecutive year of revenue growth in 2022," Billy Hult, the CEO of Tradeweb, said.

Also, Tradeweb generated a full-year ADV (average daily volume) of $1.1 trillion in 2022. This represents a growth of 9.87% year-over-year (YoY).

In the most recent update, the company presented a new market data service allowing real-time calculation of Indicative Net Asset Values (iNAVs) for exchange-traded funds (ETFs).

About the Author: Damian Chmiel
Damian Chmiel
  • 1625 Articles
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About the Author: Damian Chmiel
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
  • 1625 Articles
  • 36 Followers

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