CBOE Holdings is to acquires Bats Global in a cash and stock transaction valued at approximately USD32.50 per share, or a total of approximately USD3.2 billion, consisting of 31 per cent cash and 69 per cent CBOE Holdings stock.
The deal is based on CBOE Holdings’ closing stock price of USD70.30 per share on 23 September 2016.
The transaction will significantly expand CBOE Holdings’ product line across asset classes, broaden its geographic reach with Bats’ strong pan-European equities and global FX positions, and diversify its business mix with significant non-transactional revenue streams.
CBOE Holdings expects to use Bats’ proprietary trading technology by migrating trading in all of the combined company’s markets onto a single platform.
"The acquisition of Bats is expected to strengthen our position as a global leader in innovative tradable products and services, and is a transformative next step in our growth strategy,” says Edward T Tilly (pictured), CBOE Holdings’ chief executive officer. “We believe that bringing together CBOE Holdings’ product innovation, indexing expertise, and options and volatility market position, with Bats’ proven proprietary technology infrastructure, global ETP listing and trading venues, global foreign exchange marketplace and market data services, represents a compelling combination that should deliver significant benefits for our customers and enhanced long-term value for our stockholders. In particular, we believe the complementary nature of our respective offerings uniquely positions the combined company to provide the product set, transparency and tradability demanded by the rapidly-developing index-based investing market. Further, Bats’ market data expertise will allow CBOE Holdings to develop new products using the company’s index calculation capabilities.
“CBOE Holdings and Bats share a culture based on the goal of efficiently utilising innovation to better serve customers and the broader marketplace while enhancing stockholder value. We expect the acquisition to enhance the trading experience by streamlining access for customers and to allow CBOE Holdings to provide greater scale, while significantly increasing operational and cost efficiencies.”
“This transaction offers our stockholders immediate cash value and allows us the opportunity to continue our great growth trajectory by combining with another market innovator in CBOE,” says Chris Concannon, Bats’ chief executive officer. “Today’s announcement is a testament to the hard work and achievements of our talented employees around the globe and in every asset class in which we operate. We look forward to working with the CBOE team to facilitate a smooth integration.”
Following the closing of the transaction, CBOE Holdings expects to incorporate the functionality offered by both technology platforms and migrate onto a leading proprietary Bats’ system. By using Bats’ technology and the combined customer reach of CBOE Holdings and Bats, CBOE Holdings plans to broaden distribution of its expanded product line to provide greater breadth and depth of products and services.
