Tradeweb Wants to Buy Yieldbroker for AUD 125 Million

Tradeweb
Markets (NASDAQ: TW), a publicly-listed operator of electronic marketplaces for
money markets, announced on Thursday that it is in advanced talks to acquire
Yieldbroker, an Australian government bond and interest rate derivatives
trading platform. Tradeweb anticipates that the transaction could be finalized
for AUD 125 million.Tradeweb Wants to Buy YieldbrokerAccording
to Tradeweb, the acquisition would combine the two firms’ industry experience
and trading solutions to create more transparent, liquid fixed-income markets.
Additionally, the deal would enable Yieldbroker’s domestic clients to access the global
multi-asset platform provided by Tradeweb. In addition, Tradeweb’s clientele
would gain access to pre-trade transparency, enhanced liquidity and broader
coverage of the debt capital markets in Australia and New Zealand.”Australia
is home to the 5th largest pension fund market globally, and we believe that
this would help grow Tradeweb’s Asia Pacific footprint and provide meaningful
opportunities for domestic and global clients,” Tradeweb commented in the
written statement.However,
Tradeweb cautioned that there was no guarantee that a definitive agreement
would be reached or that the transaction would be completed. The deal is still
subject to Yieldbroker’s stockholder approval, final definitive documentation,
and regulatory reviews.ASX Comments on Proposed
SaleThe
Australian Securities Exchange (ASX), the largest Australian stock exchange
with a history dating back to 1871, currently owns about 43% of Yieldbroker,
with the remaining shares held by domestic and foreign banks as well as
platform employees. In this regard, ASX issued a separate comment
on Thursday regarding the potential acquisition, stating that it would be
conducted “on a cash-free, debt-free basis and assuming a normalized level
of working capital.””The
Proposed Transaction has been unanimously recommended to Yieldbroker
shareholders by the Yieldbroker board. Approval of Yieldbroker shareholders is
being sought to meet certain Yieldbroker constitutional requirements,” ASX
wrote.The value
of ASX shares under the terms of the transaction is approximately AUD 55
million, including transaction costs. The current book value of ASX’s interest
in Yieldbroker is around AUD 30 million. ASX stated that its participation in
the transaction is subject to the decision of the Board of Directors.Tradeweb Reports 23rd
Consecutive Year of Revenue GrowthIn February,
Tradeweb reported $293 million in revenue for the fourth quarter of 2022. The
figure jumped 5.8 percent year-over-year. Further, the company witnessed a
massive uptick of 65 percent in its quarterly net income, which came in at $99
million. It was boosted by a lower tax expense related to changes in our
deferred tax assets and an increase in interest income. On the other hand, the
adjusted income increased by 17.2 percent to $116.9 million.”Tradeweb
reported its 23rd consecutive year of revenue growth in 2022,” Billy Hult,
the CEO of Tradeweb, said.Also,
Tradeweb generated a full-year ADV (average daily volume) of $1.1 trillion in
2022. This represents a growth of 9.87% year-over-year (YoY).Our average daily trading volume for December 2022 was $1.02tn, up 11.6% year-over-year. We also reported strong volumes for Q4 and full-year 2022. Read more here: https://t.co/3nZLPMfoK1pic.twitter.com/GDizk0WMaA— Tradeweb (@Tradeweb) January 5, 2023In the most recent
update, the company presented a new market data service allowing real-time
calculation of Indicative Net Asset Values (iNAVs) for exchange-traded funds
(ETFs).