Knight Capital Group Announces Agreement To Acquire The Futures Division Of Penson Financial Services, Inc.
JERSEY CITY, N.J., May 29, 2012 /PRNewswire/ -- Knight Capital Group, Inc. (NYSE Euronext: KCG) today announced that it has agreed to acquire certain assets and liabilities of Penson Futures, the futures division of Penson Financial Services, Inc., a subsidiary of Penson Worldwide, Inc. (NASDAQ: PNSN). The terms of the acquisition call for $5 million in cash, approximately half of which covers exchange memberships and equipment, plus potential earn-outs based on financial results in the three-year period following the close.
Penson Futures provides futures execution, clearing and custody services to facilitate transactions among brokers, institutions and non-clearing Futures Commission Merchants (FCMs) on major U.S. and European futures and options exchanges. Penson Futures also offers risk management and consultation services and operates an electronic futures trading platform for professional traders and individual investors.
"Futures trading is increasingly moving toward an electronic, exchange-based model," said Tom Joyce, Chairman and Chief Executive Officer, Knight Capital Group. "With the acquisition of Penson Futures, Knight fills a strategic gap in the client offering with a top 30 FCM in the U.S. We're excited to extend our offering to include futures with a range of products from physical commodities to financial instruments by bringing aboard a quality team and applying our own considerable strengths."
"The Knight acquisition of Penson Futures provides a powerful combination of financial strength, technical expertise and futures market knowledge," said John Streich, Chief Executive Officer of Penson Futures. "This combination brings the futures industry exactly what they need at this time - strong independent futures execution and clearing."
Penson Futures is currently a member of the Chicago Board of Trade, the Chicago Mercantile Exchange, the Kansas City Board of Trade, NYSE Euronext LIFEE, the Minneapolis Grain Exchange, NYMEX, COMEX, ICE Futures US, ICE Clear Europe, NYSE LIFFE, One Chicago and LCH.Clearnet.
The acquisition, which is subject to customary closing conditions and regulatory approvals, is expected to be completed in the second quarter of 2012. Upon the close of the acquisition, the FCM will operate as a division of Knight Execution & Clearing Services LLC. Penson expects to transfer client assets within one day of the close. The acquisition is expected to be earnings neutral in year one and modestly accretive thereafter.
The legal advisor to Knight on the transaction is Wachtell, Lipton, Rosen & Katz. The advisors to Penson are Morgan Lewis & Bockius LLP as well as Moelis & Co. and Financial Technology Partners.
Knight Capital Group (NYSE Euronext: KCG) is a global financial services firm that provides access to the capital markets across multiple asset classes to a broad network of clients, including buy- and sell-side firms and corporations. Knight is headquartered in Jersey City, N.J. with a global presence across the Americas, Europe, and the Asia Pacific region. For further information about Knight, please visit www.knight.com.
Certain statements contained herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts and are based on current expectations, estimates and projections about the Company's industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict including, without limitation, risks related to the corporate restructuring in the third quarter 2011, including the ability to recognize anticipated cost savings, the possibility of unexpected costs or expenditures, and the impact of the restructuring on the Company's businesses and results of operations, risks associated with changes in market structure, legislative, regulatory and financial rules changes, risks associated with the Company's changes to its organizational structure and management and the costs, integration, performance and operation of businesses recently acquired or developed organically, or that may be acquired or developed organically in the future. Readers should carefully review the risks and uncertainties disclosed in the Company's reports with the U.S. Securities and Exchange Commission (SEC), including, without limitation, those detailed under the headings "Certain Factors Affecting Results of Operations" and "Risk Factors" in the Company's Annual Report on Form 10-K for the year-ended December 31, 2011, and in other reports or documents the Company files with, or furnishes to, the SEC from time to time. This information should also be read in conjunction with the Company's Consolidated Financial Statements and the Notes thereto contained in the Company's Annual Report on Form 10-K for the year-ended December 31, 2011, and in other reports or documents the Company files with, or furnishes to, the SEC from time to time.
SOURCE Knight Capital Group, Inc.