Tradeweb Markets (Nasdaq: TW) is going to acquire Yieldbroker, a trading platform offering Australian and New Zealand government bonds and interest rate derivatives, in a A$125 million (US$ 81..6 million) all-cash deal. As announced on Thursday, the two companies have already signed a definitive agreement.
Confirmation of the Acquisition
The acquisition deal did not come as a surprise as Tradeweb earlier announced its ongoing advanced talks with Yieldbroker.
“We are pleased to join forces with the team at Tradeweb and use our combined resources and expertise to deliver an enhanced trading experience for our customers,” said the CEO at Yieldbroker, Anthony Robson.
Australia-headquartered Yieldbroker was established in 1999 and operated institutional and wholesale marketplaces for domestic customers in Australian and New Zealand debt securities. The electronic trading platform facilitates the trading of about $6 trillion annually.
“Yieldbroker has built an incredibly strong legacy with unrivaled liquidity and coverage for domestic Australian and New Zealand fixed-income customers,” Robson added.
Compared to Yieldbroker, Tradeweb is a much larger platform that generated a full-year ADV (average daily volume) of $1.1 trillion in 2022. The ADV hit a record $1.4 trillion in the first quarter of 2023, with the company’s revenue at $329.2 million, which is an increase of 57 percent. Tradeweb offers electronic marketplaces for rates, credit, equities, and money markets.
Change of Ownership
The Australian Securities Exchange is a major shareholder in Yieldbroker with a 43 percent stake. The rest is held by domestic and international banks as well as current and former Yieldbroker employees. The ASX said that it will sell all of its Yieldbroker stake, releasing about AU$55 million, considering transaction costs.
"ASX has been a shareholder of Yieldbroker since 2014 and, given the relationship built over the years between the two organisations, ASX will continue to work closely with new owner Tradeweb to help foster long-term growth and solutions for customers in the Australian fixed income market," said Helen Lofthouse, the Managing Director and CEO at ASX.
Cross-Integrations of Services
The official announcement highlighted that the acquisition would allow Tradeweb to make markets more efficient. It will enable Australian institutions access to Tradeweb’s liquid, global, multi-asset platform. Further, the international client base of Tradeweb will have access to Yieldbroker’s Australian and New Zealand bond and derivative marketplaces and receive pre-trade pricing data offerings.
“This is an exciting opportunity for Tradeweb to better serve the participants of a highly attractive and fast-growing fixed-income market,” Tradeweb’s CEO Billy Hult, who assumed the role earlier this year, said.
“We share Yieldbroker’s commitment to client collaboration and continuous innovation, and together we will be even better-positioned to add significant value for Australian and New Zealand bond and derivatives customers. We look forward to providing our clients an even more seamless offering, as they continue to look for greater engagement and connectivity in the international markets.”
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