Citigroup has agreed to acquire Lava Trading Inc., the provider of stock-trading technology to hedge funds and other groups.
Although relatively young - it was founded in 1999 -Lava has quickly staked out a presence on Wall Street trading desks. The New York shop caters to hedge funds, large investment banks, institutional investors and other stock traders.
Lava also has a foreign exchange trading product that is expected to be launched in August.
Neither Lava nor Citigroup disclosed the terms of the acquisition, which is expected to be completed in the third quarter. Lava will operate as a unit of Citigroup, to be run independently from Lava's New York headquarters.
Richard Korhammer will remain Lava's chief executive. He will report to James Forese, managing director and head of Citigroup global equities.
Forese said: "With this move, we will catapult to a leading market position in electronic execution - which currently accounts for a significant and growing portion of total trading volume."
In a statement, Korhammer said Citigroup's resources would boost Lava's "opportunities to move into new product areas and expand our services to meet global demand for electronic trading and execution capabilities."