Deutsche BÃ¶rse buys the 360T currency trading platform for 725 million euros in a deal that underlines the forex market’s attractiveness of $ 5.3 billion per day to the exchanges.
The acquisition is the second deal announced by Deutsche BÃ¶rse since Carsten Kengeter took over as CEO on June 1. compiler.
Foreign exchange traders are thriving in currency trading, a large and increasingly electronic market that has always been conducted privately between banks. BATS Global Markets bought Hotspot, a currency trading network, for $ 365 million in January.
“Our intention [with the 360T deal] is to broaden our capture of asset classes, âsaid Deutsche BÃ¶rse. âIt’s an interesting asset class. “
The dollar’s dramatic strengthening against all its comparable currencies since mid-2014, recording its fastest growth since 1985 as the Federal Reserve prepares to raise US interest rates, has increased volumes and revenues in currency trading.
The exchanges are planning to play a bigger role in the forex market, which is expected to become more heavily regulated in the wake of the market-rigging scandal.
360T, founded in 2000, provides an online trading platform for OTC financial instruments. Its network is used by more than 1,700 buying customers around the world, according to its website.
360T had an average daily volume of $ 70 billion in 2014, according to a report by the Aite group cited by Bloomberg.
E-commerce has accounted for more than half of the total foreign exchange market this year, up from 38.5% in 2012, according to Euromoney polls. Customers are looking for a cheaper and faster alternative to brokers, and electronic transactions reduce the risk of malpractice.
The acquisition will be funded by a mix of debt and equity and is expected to increase earnings per share “immediately,” Deutsche BÃ¶rse said in a statement.
The exchange operator expects âdouble-digit millions of eurosâ revenue synergies in the medium term from the deal.
Private equity group Summit Partners took a controlling stake in 360T in 2012. Other platform shareholders include German private equity group Brockhaus. Deutsche BÃ¶rse, which like 360T is based in Frankfurt, said shareholders of the forex trading platform had signed a “definitive agreement”.
Mr Kengeter, the former head of UBS’s investment bank, left UBS last year after the Swiss bank decided to end its bond trading activities.
Since taking the helm, the exchange operator has announced plans for two major deals. Deutsche BÃ¶rse said last month it was looking to take full control of the Stoxx and Indexium joint ventures, companies that maintain indices to track financial markets. The Euro Stoxx 50 is the flagship index for blue-chip European stocks.
These companies make money through licensing agreements with creators of exchange traded funds. Acquiring them is an interesting way for stock market operators to diversify their income.
Deutsche BÃ¶rse’s last big deal was the acquisition of ISE, then the second largest options market in the United States, for $ 2.8 billion in 2007. The European Commission blocked a merger with NYSE Euronext in 2012 .