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NYSE Euronext to Acquire NYFIX for $144 million

NYSE Technologies will integrate the FIX software business and NYFIX Marketplace, but explore alternatives for Millennium dark pool.

NYSE Euronext has entered into a definitive agreement to acquire NYFIX, Inc., through its wholly owned subsidiary NYSE Technologies for about $144 million, according to today’s announcement.

NYSE Technologies will integrate both the FIX software business and the NYFIX Marketplace. However, the release suggests that NYSE Euronext will explore various alternatives for the NYFIX Transactions Services business, including its Millennium dark pool.

NYSE Euronext will pay $1.675 per share of common stock in an all-cash deal, according to the release. But the total value of the deal at $144 million includes preferred stock consideration.

The NYSE Euronext, NYSE Technologies and NYFIX Boards of Directors have approved the acquisition, which is subject to the approval by NYFIX shareholders and regulators. The transaction is expected to close in the fourth quarter of 2009 and contribute to NYSE Euronext 2010 earnings.

As of the deal closing, the NYFIX FIX (Financial Information Exchange) business including the industry-leading FIX Software business and the NYFIX Marketplace, will become part of the offerings of NYSE Technologies, the commercial technology division of NYSE Euronext. NYFIX Marketplace is one of the industry’s broadest and deepest FIX-based communities where more than 1,000 global trading counterparties connect to one another via more than 9,000 fully managed FIX-based messaging channels, according to the company-issued release. The integration of both the FIX software business and the NYFIX Marketplace complements NYSE Technologies’ suite of commercial technology products, noted the release.

In a statement, NYFIX CIO Howard Edelstein said, “The agreement we have reached with NYSE Euronext represents substantial value for NYFIX shareholders. This is an all cash deal at a premium to the current market for NYFIX shares.” Additionally, Edelstein said, “NYFIX customers would benefit through the combination of two of the industry’s leading trading communities, creating a global transaction marketplace connecting buy-side and sell-side, as well as from the strength of the NYSE Euronext platform and global brand.”

According to Stanley Young, CEO of NYSE Technologies and co-CIO, NYSE Euronext, in the release, the NYFIX connectivity business “fits nicely” into its SFTI Integrated Partner Solutions. “The synergies will be particularly apparent to the pre-trade buy-and sell-side communities, which will benefit from a broad combination of technology assets and connections for efficient end-to- end transaction processing.

Edelstein led a complete overhaul of the company over the past three years, which made the transaction possible.

Once the acquisition is completed, the NYFIX business will report to Young. Bob Moitoso will continue to lead the NYDIX FIX business. Edelstein will stay on through the close of the transaction.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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