Virtu Financial to acquire broker ITG for $1bn

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High-speed trading firm Virtu Financial has agreed to buy New York-based brokerage firm Investment Technology Group (ITG) in an all-cash deal worth around $1bn.

As per the agreed terms of the transaction, ITG shareholders will be entitled to receive $30.30 in cash for each share held.

Virtu expects the acquisition to result in around $123m of net pre-tax expense savings and $125m of capital synergies.

Further, Virtu said that the deal will raise its revenue contribution from Technology and Execution Services to 37% from 10%.

Virtu CEO Douglas Cifu said: “ITG has built a first-class global institutional client franchise with incredible people that will benefit from this strategic combination. We are fully committed to growing and improving the complete agency execution offering that ITG’s clients use every day – Liquidity, Execution Services, Workflow Technology and Analytics.

“This combination will leverage Virtu’s financial technology – the same technology that drives our market making performance – to optimise all aspects of the business, from order routing and algo performance to middle- and back-office efficiency.”

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The deal is slated to be completed in the first half of next year, subject to shareholder and regulatory approvals.

Cifu and Virtu CFO Joseph Molluso will retain their existing positions at the merged entity.

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