Deal is expected to occur in Q3 2017

Deal is expected to occur in Q3 2017

Pan-European exchange Euronext will acquire about 90% of FastMatch for $153 million as part of its expansion plans in the $5.1 trillion daily foreign exchange (FX) market.

FastMatch’s management will retain about 10% interest, with minority rights. Closing is subject to regulatory and anti-trust approvals, and is expected to occur in Q3 2017.

Stéphane Boujnah, chairman and CEO of the managing board of Euronext, says the acquisition “will broaden the spectrum of products we provide to capital market users, whilst meaningfully diversifying our revenue”.

FastMatch has three data centres (London, New York and Tokyo), and its proprietary technology is used by Tier-1 banks, non-bank market makers, broker-dealers, asset managers and hedge funds. As of Q1 2017, FastMatch reported $5.8 million revenue, up 48.8% compared to Q1 2016, and $2.4 million EBITDA (41.0% margin), 3.6 times the EBITDA for Q1 2016.

Euronext says it will bolster FastMatch’s European presence through increased access to institutional clients across the continent. In the short term, they will roll-out real-time and historical data products, while in the mid-term, they will aim to achieve a presence in the FX derivatives space.

Euronext is keen on explanations, and says the rationale behind the deal lies in the G20 post-credit crisis response, which has created a regulatory drive and resulted in a trend of electronification of spot FX trading where 66% of trading in 2016 was electronic, growing from 55% in 2010.

FastMatch was established in 2012 by Credit Suisse and UK-based online forex trading and CFD broker FXCM.