Group Co.
Cowen Group Announces Convergex Purchase
Traders Magazine Online News, April 3, 2017
Agency brokerage and technology firm Convergex has found a more permanent home.
Convergex, which has been owned by private equity firm GTCR, Bank of New York and other shareholders, has been purchased by the Cowen Group for a total consideration, less certain closing adjustments, of $116 million in cash and Cowen common stock.
Upon closing, the transaction will position Cowen as the leading independent trading platform in equities with high quality research and best-in-class global execution capabilities. With combined pro forma brokerage execution revenues of over $400 million in 2016, the transaction solidifies Cowen as a clear leader in U.S. trading volume and expands Cowen’s reach to 108 countries around the globe, including China. Cowen expects the acquisition to be accretive to economic income per share and return on tangible common equity in 2018.
Eric Noll
Convergex is a leading agency-focused global brokerage and trading related services provider with a deep client base of 2,500 hedge funds, asset managers, broker-dealers, trusts and exchanges. Business units include equity sales and electronic trading, commission management, prime services and global clearing.
“We are thrilled by today’s announcement and welcome Convergex’s extremely talented team to Cowen,” said Jeffrey M. Solomon, President of Cowen. “Together, our combined best-in-class global execution capabilities, along with Cowen’s high-quality research and corporate finance advisory services, will enable us to continue helping our clients to outperform in challenging markets. The addition of Convergex’s global platform will also establish meaningful scale for Cowen’s equities business by significantly bolstering our capabilities in prime services, commission management, algorithmic and electronic trading, as well as clearing services. We expect that our increased scale will unlock significant economic benefits for our shareholders by providing greater revenue resiliency through market cycles and improved profitability through potential cost synergies.”
Eric W. Noll, President and Chief Executive Officer of Convergex Group said, “This strategic transaction is an exciting opportunity for both our clients and our employees. Convergex has grown significantly as an agency-focused provider of execution services and trading technology partner. The ability to combine with a great research based firm like Cowen, which has complementary businesses with minimal client overlap, creates a tremendous opportunity for our people and our clients. By forging this combination with enhanced experience and expertise, our respective clients will now have access to a wider array of global offerings and innovative solutions.”
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