Liquidnet is a technology-powered institutional investment network with specialisation in equities dark trading

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Liquidnet is an electronic trading network based in the US. (Credit: Gerd Altmann from Pixabay)

Inter-dealer broker TP ICAP said that it is in advanced talks to acquire Liquidnet, a US-based electronic trading network, for a total consideration in the range of $600m and $700m.

Liquidnet is a technology-driven institutional investment network, which connects asset managers with liquidity. It specialises in equities dark trading.

Founded in 1999, the company develops and deploys financial technology solutions for institutional asset managers across a global equities and corporate bond network.

Its equity offering includes an agency-only block trading platform for institutional investors. The platform provides them with a variety of execution solutions, algorithmic and quantitative models, liquidity-sourcing techniques in dark as well as lit markets, and advanced analytics.

Liquidnet’s network is said to have more than 1,000 institutional investors who collectively manage equity and fixed income assets totalling $33 trillion. The company operates in 45 markets across the world.

On the other hand, the UK-based TP ICAP is among the largest wholesale market intermediaries in the world. Its portfolio of businesses offers broking services, data and analytics, and market intelligence from offices in 26 countries.

TP ICAP said that it plans to pay nearly $550m upfront for the acquisition of the US firm while the remaining payment will consist of $50m in deferred non-contingent consideration and $100m in the form of an earn-out.

TP ICAP stated: “The Potential Acquisition would be expected to transform TP ICAP’s revenue growth profile, with almost half of the Enlarged Group’s revenue coming from higher-growth businesses and the Enlarged Group’s revenue growth profile expected to increase from low single digit to mid-single digit over the medium-term.”

However, TP ICAP noted that there can be no assurance that the ongoing talks with the US firm will result in any agreement.

Liquidnet recently announced its debt capital markets technology offering

Last month, Liquidnet forayed into the debt primary market technology space by announcing the launch of a new electronic solution called Liquidnet Debt Capital Markets (DCM).

The new primary market solution, which targets the European corporate bond market, is designed to automate and optimise the new issue workflow.