As Group ceo of TriOptima, I am pleased to reiterate ICAP’s announcement on Friday 5 February of an agreement to acquire all the outstanding share capital of TriOptima that they don’t already own. At TriOptima we see this as a natural step in the continued development of the company.
TriOptima is today, more than ever, an important part of the OTC derivatives industry infrastructure. Industrial ownership ensures the stable, long-term development of the company and strengthens our role as a long-term partner to our clients.
ICAP has been the largest minority shareholder in TriOptima for eight years and has participated through their board representatives in the development of our company strategy, our products and our organization. ICAP is therefore in a completely unique position to support TriOptima’s continued development. At the same time, ICAP has pursued a visionary strategy for development of its post-trade services businesses, and TriOptima fits very well into this strategy.
Below, please find an excerpt from the ICAP press release of February 5 announcing the TriOptima acquisition.
We look forward to continue providing innovative post-trade services and industry infrastructure to the OTC derivatives market, as always.
Brian Meese
Group CEO TriOptima
Acquisition of TriOptima AB
ICAP Group Holdings plc, a wholly owned subsidiary of ICAP plc, has reached agreement to acquire all the remaining 61.78% of the share capital of TriOptima AB, which ICAP does not already own, for an initial payment of approximately €109 million payable in cash together with a further amount of approximately €12 million in respect of working capital. This payment will be financed from ICAP’s existing debt facilities.
Following the initial payment, there are two further potential payments based on revenue and profit targets for the period to 31 December 2012. These further payments can be made in cash, ICAP shares or a combination of the two at ICAP’s discretion. The agreement is subject to regulatory approval in Sweden.
The acquisition is expected to be earnings enhancing from the date of completion.
Commenting on outlook, Michael Spencer, Group Chief Executive Officer of ICAP, said "We are very pleased to have reached agreement to acquire all the remaining share capital of TriOptima AB that ICAP does not already own. TriOptima is a highly successful, technology led business that has performed extremely well since we made our initial investment nine years ago. They are an established market leader in the automation of post trade and risk management processes in the OTC markets. Post-trade services are an area where risk management allied with technology innovation is creating exciting new high growth opportunities for ICAP.”
TriOptima AB, based in Stockholm, is an international financial technology company that solves some of the most challenging post-trade processing problems in the OTC derivatives market. Focused on reducing costs and eliminating risks for its customers, TriOptima offers a range of services including triReduce, the multilateral termination service for interest rate, credit and energy derivatives; the triResolve service for portfolio reconciliation and exception management of OTC derivative portfolios; and the OTC Derivatives Interest Rate Trade Reporting Repository.
In 2009, TriOptima’s multilateral termination service, triReduce, eliminated $14.5 trillion of outstanding credit derivatives contacts and $25.8 trillion of outstanding interest rate derivatives contracts.
ICAP originally invested in TriOptima when the business was founded in 2001. TriOptima has been profitable for several years and in 2009 achieved profit before tax of almost €30 million. The company now has 102 employees and gross assets of €36.5 million. Following the acquisition, the senior management and founders of TriOptima, including Brian Meese, Chief Executive Officer, will remain with the business and continue it within the ICAP Group.
Demand for improvements in market infrastructure will continue to provide major opportunities for the expansion of ICAP’s post-trade service businesses. In the half year to September 2009, 19% of ICAP’s profit2 came from post-trade and information services.
Brian Meese, TriOptima’s Chief Executive Officer, commented, "TriOptima and ICAP share a vision of providing comprehensive post-trade services to the OTC markets. By becoming part of ICAP, TriOptima will be able to more rapidly expand the range of post-trade and risk management services we provide. We anticipate significant growth opportunities from working closely with ICAP’s other post-trade and risk management businesses to provide a higher level of service to our combined customer base.”
