Knight Capital Group Announces Agreement to Acquire Designated & Lead Market Maker Businesses from Kellogg Capital Markets

Acquisition augments Knight's current partnership with NYSE Euronext through the addition of the DMM and LMM units

Oct 28, 2010, 16:51 ET from Knight Capital Group, Inc.

JERSEY CITY, N.J., Oct. 28 /PRNewswire-FirstCall/ -- Knight Capital Group, Inc. (NYSE Euronext: KCG) today announced that it has entered into an agreement to acquire Kellogg Capital Markets' (Kellogg) Designated and Lead Market Maker businesses, which make markets in approximately 800 NYSE and NYSE Amex listed securities and 322 NYSE Arca exchange traded funds (ETFs).  Knight anticipates that it will assume Kellogg's responsibilities across its entire portfolio of NYSE-, NYSE Arca- and NYSE Amex-listed securities as well as Kellogg's participation in the NYSE Amex UTP program.

The acquisition will build upon Knight's electronic market making business by adding another venue in which to make markets. It will also leverage Knight's strengths in trading technology to efficiently provide liquidity for its new listing companies. Kellogg's Designated Market Maker (DMM) business will complement Knight's current liquidity providing activities as a Supplemental Liquidity Provider (SLP) on NYSE and a NYSE Amex UTP DMM. The addition of Kellogg's ETF Lead Market Maker (LMM) business will be incremental to Knight's electronic market making and institutional ETF sales and trading team.

"The Kellogg acquisition is a natural extension of two of our already successful businesses: electronic market making and ETF trading," said Thomas M. Joyce, Chairman and Chief Executive Officer, Knight Capital Group. "We are excited to further our partnership with the NYSE Euronext, a prominent global brand. We also look forward to continuing the strong and meaningful relationships that Kellogg has built with its listed companies."

Kellogg Group is a privately-held, financial services organization which operates a leading market maker, and an institutional broker-dealer servicing customers across a broad spectrum of securities and services through its subsidiaries Kellogg Capital Markets, LLC and Kellogg Partners Institutional Services, LLC.

Kirk Kellogg, Chief Executive Officer of Kellogg Group, said, "I am pleased that Knight will be able to continue Kellogg's market making tradition on the New York Stock Exchange.  Knight is a well-respected, innovative firm that shares a strong commitment to delivering superior trade execution services. Under Knight's management, I am confident in the long-term success of our employees and our listed companies."

"We welcome the expansion of Knight's commitment to our market model and listed issuers," said Larry Leibowitz, Chief Operating Officer, NYSE Euronext.  "Knight brings to this new role its strong performance as an NYSE Supplemental Liquidity Provider, an NYSE Amex designated market maker in Nasdaq securities, and NYSE Arca lead market maker, as well as its exceptional track record of market making expertise and technology.  We thank Kellogg for its many contributions to NYSE Euronext markets over the years."

The closing of the acquisition is subject to customary closing conditions and appropriate regulatory approvals. The purchase price was not disclosed. The acquisition is expected to be completed in the fourth quarter of 2010. The acquisition is expected to be slightly accretive to Knight's earnings per share in 2011. Upon the close of the acquisition, the DMM and LMM businesses will be part of one of Knight's wholly-owned operating subsidiaries.

The advisors to Knight on the transaction are Wachtell, Lipton, Rosen & Katz. The advisors to Kellogg are Brunelle & Hadjikow, P.C.

About Knight

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 growing global presence across the Americas, Europe, and the Asia Pacific region. For further information about Knight, please visit

About NYSE Euronext

NYSE Euronext (NYX) is a leading global operator of financial markets and provider of innovative trading technologies.  The company's exchanges in Europe and the United States trade equities, futures, options, fixed-income and exchange-traded products.  With approximately 8,000 listed issues (excluding European Structured Products), NYSE Euronext's equities markets – the New York Stock Exchange, NYSE Euronext, NYSE Amex, NYSE Alternext and NYSE Arca – represent one-third of the world's equities trading, the most liquidity of any global exchange group. NYSE Euronext also operates NYSE Liffe, one of the leading European derivatives businesses and the world's second-largest derivatives business by value of trading. The company offers comprehensive commercial technology, connectivity and market data products and services through NYSE Technologies. NYSE Euronext is in the S&P 500 index, and is the only exchange operator in the S&P 100 index and Fortune 500.  For more information, please visit:

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 associated with changes in market structure, legislative or regulatory rule changes, the costs, integration, performance and operation of businesses recently acquired or developed organically, or that may be acquired in the future, by the Company and risks related to the costs and expenses associated with the Company's exit from the Asset Management business. Since such statements involve risks and uncertainties, the actual results and performance of the Company may turn out to be materially different from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made herein. 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, 2009, "Risk Factors" in the Company's Quarterly Report on Form 10-Q for the quarter-ended March 31, 2010, 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, 2009, and in other reports or documents the Company files with, or furnishes to, the SEC from time to time.

SOURCE Knight Capital Group, Inc.