JC Flowers exits Asia trading platforms business
JC Flowers has agreed to sell Hong Kong-based Chi-X Asia Pacific, which operates equity trading platforms in Australia and Japan, to US-based Cboe Global Markets.
Financial terms were not disclosed. The transaction is expected to close in the second or third quarter of 2021.
JC Flowers acquired 100% of the business in 2016 for an undisclosed sum. Since then it claims to have helped develop new products and services and grown consolidated gross revenue of core operations by more than 85%.
Chi-X Asia Pacific generated $26.5 million in net revenue in 2020, up 26% year-on-year. Of this, 67% was recurring, non-transaction revenue, primarily related to market data and access fees. Cboe has described it as one of the fastest-growing market operators in the region.
"In the course of this investment, JC Flowers deployed capital, technology, and human resources to create significant market positions in equity-related trading in the important markets of Japan and Australia," Thierry Porte, a managing director at JC Flowers, said in a statement. "We are gratified to see these efforts recognized by Cboe, which is known globally for offering cutting-edge trading and investment solutions.”
Chi-X Australia (CXA) is the second-largest securities exchange locally with an 18.4% market share, offering trading in all Australia-listed securities as well as CXA-quoted warrants, exchange-traded funds, and listed mutual funds. Chi-X Japan (CXJ) is the third-largest market in the country with four equity trading venues offering both lit and dark pool trading. Both markets are serviced by an in-house technology unit in the Philippines.
Chi-X was founded in 1969 as Instinet and is considered a pioneer of electronic trading. NASDAQ and Silver Lake acquired the company in 2005 and sold it in 2007 to Nomura, which implemented a global expansion. Chi-X Europe was established in 2007 and acquired by Bats Global Markets in 2011. Chi-X Canada was set up in 2008 and acquired by NASDAQ in 2016. The Australia and Japan units launched in 2011.
New York and London-based JC Flowers claims to have invested more than $16 billion in 58 companies globally since its inception in 1998 with a focus on financial services. The firm currently has about $6 billion in assets under management.
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