This acquisition represents an important element in Interactive Dataâs strategy to address the latency sensitive trading needs of its institutional customers. Acquiring 7ticks will accelerate Interactive Dataâs plans to increase the flexibility, agility and resiliency of its network infrastructure, thereby supporting a broader range of high-quality direct exchange access and consolidated datafeed services.
7ticks specializes in providing a growing base of proprietary trading groups, clearing firms, global investment banks, brokers, market makers, hedge funds and independent software vendors with direct exchange access, proximity hosting, and support services for facilitating ultra low latency electronic trading of North American derivatives, options and commodities securities. 7ticks distinguishes itself through industry leading network performance, reliability and monitoring, which can help provide customers with greater insight and transparency into their network connectivity and lower their cost of ownership. The company is privately owned and is headquartered in Chicago, Illinois with hosting facilities in Chicago, the New York area, London and Frankfurt.
In recent years, financial institutions have increasingly moved to evolve their trading operations to take advantage of changes in the financial markets and continual advances in technology by deploying sophisticated automated trading programs. Successful execution of these trading programs requires ultra low latency connectivity between an institutionâs trading systems and a broad range of stock exchanges and trading venues. According to Tabb Group, a leading financial markets research and advisory firm, the global market for low latency connectivity services for direct exchange access is expected to grow from approximately $1.4 billion in 2009 to over $2.0 billion by 2012.
Interactive Data expects to retain all of 7ticksâ 42 full-time employees, including its leadership team. The 7ticks business will be operated as part of Interactive Dataâs newly formed Real-Time Market Data and Trading Solutions Group, which is led by Jeffrey Banker (see separate announcement also issued today). Services from 7ticks will be marketed as Interactive Data 7ticks following the acquisitionâs completion. 7ticks is in the process of increasing its U.S. equities coverage and has plans to expand further into Asia and Europe in the coming twelve months.
âIncreasing our penetration in the electronic trading sector is one of our top long-term strategic priorities, and we believe that acquiring 7ticks will enable us to make significant progress in this area,â stated Ray DâArcy, Interactive Dataâs president and chief executive officer. âOver a relatively short period of time, 7ticks has built a world-class, ultra low latency network infrastructure that is attracting a growing number of leading-edge institutional customers. We are excited by the opportunities we see to elevate our value proposition to our global customer base by combining our low latency consolidated market data services with ultra low latency managed connectivity from 7ticks.â
âWe are extremely pleased to join forces with Interactive Data,â stated Joe Bigane, managing director for 7ticks. âDuring the past few years, we have generated significant momentum in the marketplace and we are well positioned to build on this initial success. With Interactive Dataâs extensive range of complementary world-class offerings, strong customer relationships, extensive global distribution channels and financial resources, we believe that we can accelerate our growth as we expand our customer base and build out our infrastructure.â
Assuming the transaction closes in early 2010, Interactive Data anticipates that the acquired business will be accretive to earnings by 2011 through a combination of planned revenue growth and operational synergies.