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ITG Acquires Ross Smith Energy Group

Expands Research Platform with Data-Driven Analysis of the Oil and Gas Sector.

Investment Technology Group, Inc. (NYSE: ITG), a leading agency research broker and financial technology firm, today announced that it has acquired Ross Smith Energy Group Ltd. (“RSEG”), a Calgary-based independent provider of research on the oil and gas industry. Going forward, RSEG will be rebranded as ITG Investment Research and the research offering will be an integrated part of the ITG platform.

RSEG provides detailed technical and financial analysis of North American resource plays, public and private corporations, as well as coverage of international and macroeconomic energy issues, for more than 200 clients in North America and Europe, including more than 60 equity fund managers who are new clients for ITG. RSEG’s team of approximately 40 staff includes professional engineers, technologists and financial analysts. With the addition of RSEG, ITG Investment Research will provide differentiated views into the exploration and production activities of North American and international energy companies.

“This acquisition marks a significant expansion for the ITG Investment Research platform,” said Bob Gasser, CEO and President of ITG. “With the addition of energy sector coverage, ITG is even better positioned to offer alpha-generating insights to our clients and to work towards our goal of being a leading partner in both research and execution on a global scale.”

Jim Jarrell, President of Ross Smith Energy Group, said, “ITG’s focus on providing differentiated research and building relationships within the institutional investment community make it a natural fit for us. We share a vision. My colleagues and I are excited about bringing the ITG platform to our existing clients and our collective expertise and service to a broader set of investors.”

Transaction Details:

RSEG, a privately held firm, was founded in Calgary, Alberta in 1998. RSEG revenues for the trailing twelve months ending in April 2011 were approximately US$15 million. Adjusted pre-tax margins, excluding non-operating expenses which will not continue beyond the acquisition, were approximately 25% for the trailing twelve months.

The purchase price for RSEG was US$38.5 million in cash. The transaction is not expected to add materially to earnings in 2011 due to one-time acquisition and integration charges, however, ITG estimates the transaction will add $0.08 to $0.10 per diluted share of earnings in 2012. In addition, the structure of the transaction is expected to result in a 15-year tax benefit to ITG’s cash flow with an estimated present value of US$7 million. ITG management will discuss the transaction in more detail during the Second Quarter 2011 earnings call on August 4th.

In reliance upon New York Stock Exchange Rule 303A.08, ITG granted inducement awards pursuant to which an aggregate of 362,951 time-vesting stock units (“RSUs”) were awarded to 15 employees on June 3, 2011. Each of these employees was previously an employee of RSEG who joined ITG as a result of the acquisition. The RSUs vest over a three-year period.

ITG also announced that it entered into a $25.5 million, four-year term loan secured by certain fixed assets, to help preserve its balance sheet flexibility following the acquisition.