Citi to Acquire ATD
Addition of Automated Trading Innovator To Create Top-Tier Liquidity Aggregator
New York – Citi Markets & Banking today announced it has agreed to acquire Automated Trading Desk (ATD), a leader in electronic market making and proprietary trading for approximately $680 million in cash and stock. The addition of ATD will make Citi a top-tier aggregator of equity order flow and will provide institutional, broker/dealer and retail clients with access to deeper pools of liquidity.
ATD will operate as a unit of Citi’s Global Equities business and complement the significant investment in electronic trading and execution the firm has made as well as enhance its traditional equities sales and trading capabilities. ATD adds a network of broker/dealer customers to Citi’s diverse base of institutional, broker/dealer and retail customers. Citi intends to leverage its global capabilities and expand ATD’s technology and trading expertise to markets around the world which are experiencing similar growth in trading volume and electronic execution.
“ATD’s strong management team and the company’s market-leading technology will help us provide best execution to all of our clients by enhancing liquidity through the aggregation of greater flow,” said James Forese, Head of Global Equities at Citi. “The combination of Citi’s Global Equities business and ATD will create a leading U.S. stock trading platform.”
ATD will maintain its headquarters in Mount Pleasant, South Carolina. ATD’s Chief Executive Officer Steven Swanson will retain his role as CEO of ATD and lead the global expansion and development of Citi’s electronic market making capabilities.
“Citi offers ATD a unique opportunity to utilize our technology in both domestic and international markets. The combination of our businesses will position us as a leader amid the rapid evolution of global market structure,” Swanson said. “This combination will be an outstanding opportunity for our customer base.”
The acquisition of ATD is the latest in a series of acquisitions and investments Citi has made in recent years to strengthen its electronic and alternative execution business. These acquisitions include Lava Trading, Knight’s options market making business, TD Waterhouse Capital Markets and the OnTrade ECN.
ATD has about 120 broker/dealer customers and trades, on average, more than 200 million shares a day. The company presently handles approximately 6 percent of NMS trading volume.
Total consideration for the purchase includes $102.6 million in cash and approximately 11.17 million shares of Citi stock. The transaction is expected to close in the third quarter and is subject to regulatory approval.
Citi Markets & Banking acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as primary legal counsel to Citi. Financial Technology Partners LP and FTP Securities LLC (together “FT Partners”) acted as the exclusive strategic and financial advisors to ATD in this transaction and provided a fairness opinion to ATD’s Board of Directors. Blank Rome LLP served as primary legal counsel for ATD in the transaction.
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