With offices in Sao Paulo and Rio de Janeiro, Liquidez is a leading Brazilian inter-dealer broker (âIDBâ) for foreign exchange derivatives, commodities, credit, equities, and interest rate products. Since its founding in 1985, Liquidez has grown to become one of the top-ranked brokerage houses in the Brazilian financial market and is one of the most active players on the Brazilian Mercantile and Futures Exchange (âBM&Fâ.) In 2007, Liquidezâs brokerage revenues increased by 71 percent to approximately R$51 million (or over US$26 million.) Liquidez accounts for approximately 12 percent of all contracts traded on the BM&F, making it the second-highest ranked broker in the market. (BM&F recently merged with BOVESPA to become BM&FBOVESPA, one the five largest exchanges in the world in terms of both volume and market value.)
Lee M. Amaitis, Co-Chief Executive Officer of BGC Partners, Inc., said: âWe are delighted that Liquidez will be broadening our ability to serve Brazil, Latin Americaâs largest market and one of the worldâs largest economies. Its strong GDP growth has made Brazil a key driver of global economic expansion, which is reflected in the tremendous volume growth in the countryâs overthe- counter and exchange traded products over the past several years.â
âThe addition of Liquidez, with its 70 brokers, will allow BGC to benefit from these strong fundamentals and to develop a significant IDB business in Brazil, even as it provides a platform for further expansion in other parts of Latin America,â he added.
Arnaldo Cezar Coelho, President and CEO of Liquidez said, âThis agreement marks an important milestone for Liquidez. We will benefit greatly as we leverage BGCâs investment in its cutting-edge technology and global platform. Our brokers will be able to both increase their productivity and greatly expand the number of services and products available to Brazilian clients. In addition, BGCâs clients around the world will benefit from the liquidity we can provide due to our deep and long-standing relationships with leading Brazilian financial institutions.â
BGC Partners has agreed to purchase Liquidez for an initial consideration made up of approximately an even amount of cash and partnership equity and which values Liquidez at approximately 7 times its expected 2008 post-tax profits. The transaction is expected to close in the first quarter of 2009 and to be immediately accretive to BGC Partnersâ distributable earnings1. This acquisition marks the latest development in the growth and expansion of BGC Partners, which as of June 30, 2008, had 1,281 voice/hybrid brokers in 16 offices around the world, and follows the acquisition of Radix Energy as well as the merger with and into eSpeed Inc., both of which occurred earlier this year.