Exchange operator Cboe Global Markets has announced that it has completed its previously announced planned of acquisition of MATCHNow, the largest equities alternative trading system (ATS) in Canada.
Cboe acquired MATCHNow from Virtu Financial. Terms of the deal were not disclosed, however the company noted that the purchase price is not material from a financial perspective. The acquisition is expected to be immediately accretive to earnings at Cboe, contributing approximately $0.01 to earnings per share in 2020. MATCHNow is a profitable business that generated over CAD $10 million in revenue in 2019.
The acquisition also provides Cboe with an interesting expansion opportunity into Canada, home to one of the largest global equities markets.
Toronto-based MATCHNow is a Canadian marketplace that offers execution for institutional, proprietary and retail orders by combining frequent call matches and continuous execution opportunities in a fully confidential trading book. Founded in 2007, MATCHNow has grown to account for nearly 65% of market share in total Canadian dark trading, or approximately 7 percent in total Canadian equities volume.
With this acquisition, Cboe gains a foothold in a key global capital market, while expanding the company’s geographic presence and diversifying the product capabilities of its equities business. Following a proven playbook used to grow its European equities business, Cboe said it plans to leverage its world-class technology, product innovation and expertise in operating markets to build out a more complete North American equities business.
Ed Tilly, Chairman, President and Chief Executive Officer of Cboe Global Markets, said:
“As a global exchange operator with significant U.S. and European equities marketplaces, we believe Cboe’s core strengths will bolster MATCHNow’s ability to bring more choice and competition to the Canadian marketplace. Adding MATCHNow to the Cboe roster is part of our vision to create a broader North American equities platform, helping Cboe deliver our innovative solutions to a wider customer base. I am delighted to welcome Bryan Blake and the entire MATCHNow team to Cboe and am excited by the opportunities this deal can create.”
The Cboe said that MATCHNow shares Cboe’s customer-first approach to providing solutions that address real needs in the marketplace, including the exploration of new order types that can help further enhance liquidity. MATCHNow’s Conditional Orders, which enable subscribers to electronically indicate block size liquidity in MATCHNow, are meeting market participants’ demand for more choice and flexibility, providing a valuable source of additional liquidity in Canada’s equities markets.
MATCHNow Chief Executive Officer Bryan Blake, who joins Cboe as Vice President, Head of Canadian Equities, said,
“Cboe’s legacy of innovation not only includes its flagship products, but also its ability to create and develop new markets and market models, many of which have grown to become some of the largest, most-relied upon in the world. I couldn’t be more excited for MATCHNow’s future as part of the Cboe team. Their demonstrated experience will be essential to building out a comprehensive equities platform in Canada and beyond.”