Virtu Financial, Inc. (NASDAQ:VIRT) rose Wednesday after Investment Technology Group (NYSE:ITG) agreed to be acquired by Virtu Financial for $30.30 per share.
A news release revealed how the buy "underscores Virtu’s commitment to its institutional client franchises and is a natural next step in its growth by offering its clients a complete suite of agency services, including transparent trading and workflow technology, analytics, and liquidity solutions that all leverage Virtu’s global, scaled technology infrastructure."
Virtu CEO Douglas Cifu said, "Virtu’s focus and investment in our agency offering is evidenced by the continued growth in our business and the strong uptick we’ve seen this year and through October. The combination announced today brings together complementary strengths that amplify our ability to help our clients source liquidity and improve their workflow."
Virtu intends to fund the all-cash transaction with new gross borrowings of $1.5 billion. Virtu intends to repay the $400 million aggregate principal amount outstanding under its existing term loan.
Virtu has received committed financing from Jefferies and Royal Bank of Canada for up to $1.5 billion of debt financing for the transaction.
Virtu intends to maintain its annual dividend of $0.96 per share after the close of the transaction.
Cifu continued, "ITG has built a first-class global institutional client franchise with incredible people that will benefit from this strategic combination. We are fully committed to growing and improving the complete agency execution offering that ITG’s clients use every day – Liquidity, Execution Services, Workflow Technology and Analytics."
The transaction is expected to close during the first half of 2019 after receipt of ITG shareholder approval and all required regulatory approvals.
Shares in VIRT gathered $1.46, or 5.9%, to $26.10, while those in ITG popped $2.25, or 8.1%, to $30.00
