Cboe Global Markets acquires BIDS Trading
Cboe Global Markets has completed its acquisition of BIDS Trading, a registered broker-dealer and the operator of the BIDS Alternative Trading System (ATS), the largest block-trading ATS by volume in the US.
Through ownership of BIDS Trading, Cboe gains a competitive foothold in the off-exchange segment of the US equities market, which now accounts for more than 40 per cent of overall US equities trading volume. The acquisition of BIDS Trading also provides Cboe with the opportunity to expand its global footprint and diversify its product and service offerings in markets beyond U.S. equities and options.
The acquisition follows Cboe and BIDS Trading's successful partnership in Europe, which began in 2016 with the creation of Cboe LIS for European equities block trading. Since its launch, Cboe LIS has grown to become one of the largest block trading platforms in Europe, accounting for approximately EUR240 million in average daily volume.
Cboe Global Markets Chairman, President and CEO Ed Tilly, says: "Through our successful collaboration on Cboe LIS, Cboe and BIDS Trading have established a proven track record in delivering best-in-class block trading capabilities for European equities. We are excited to have Cboe's reach extend into the off-exchange segment of the US equity markets through its ownership of BIDS Trading, and to broaden our ability to potentially expand into other asset classes and geographies as well. I am pleased to welcome the entire BIDS Trading team to Cboe."
Cboe will maintain the BIDS ATS as an independently managed and operated trading venue, separate from and not integrated with the Cboe US securities exchanges. BIDS Trading Chief Executive Officer Tim Mahoney will remain in his current role and lead BIDS Trading as an independent business within Cboe Global Markets, reporting into an independent committee of the board of Cboe Global Markets.
BIDS Trading CEO Tim Mahoney says: "We have had a long and fruitful relationship with Cboe and have achieved remarkable success with Cboe LIS in Europe and we are excited by the additional opportunities and benefits that this acquisition could bring to BIDS Trading subscribers and sponsored users. We look forward to becoming a part of the Cboe Global Markets family and continuing to build on our history of successful innovation."
Terms of the deal were not disclosed, however the company noted that the purchase price is not material from a financial perspective. BIDS Trading generated approximately USD41 million in net revenue over the last 12 months ending 30 September, 2020. Cboe also reiterated that it expects the acquisition of BIDS Trading to be immediately accretive to the company's earnings, contributing adjusted earnings per share of approximately USD0.05 - USD0.06 in 2021.
Legal advisors to Cboe Global Markets on the transaction were Davis Polk & Wardwell LLP and WilmerHale, and financial advisors were Goldman Sachs & Co. LLC and Centerview Partners LLC. Legal advisors to BIDS Trading were Morgan, Lewis & Bockius LLP and Willkie Farr & Gallagher LLP, with Broadhaven Securities, LLC serving as financial advisor.