New dawn for electronic trading outsourcing with acquisition of Fixnetix

By Madhvi Mavadiya | 17 August 2015

It was announced last week that UK trading technology group Fixnetix has been acquired by US technology provider CSC in an attempt to outsource banking and broking business in the high speed trading and data services industry.

Post foreign exchange scandal, IT costs have increased due to the rapid switch to electronic trading over the phone, according to The Financial Times. This acquisition is the start of a bright future for the trading tech group as they are no longer bound by a shareholding from NYSE Euronext which made an investment of $17.5 million in order to build connections for global trading.

Chief executive of technology research company Megabuyte, Ian Spence, believes that CSC will be beneficial for Fixnetix. “CSC’s financial backing can only help and, compared with the investment by NYSE, should be more stable,” Spence said. According to the FT, Intercontinental Exchange, the new owner, planned a breakdown for the company after an $11 billion purchase of the exchange in 2012, but relieved themselves of their stake for just £200 last year.

Spence continued to say that “we would not be surprised if the CSC deal was at similar or higher levels, representing two times or more 2015/16 revenues, given the company’s resumed fast growth.” Fixnetix has struggled in the past because of their smaller size but has kept afloat due to the growing need for data centres by banks, as they begin to take more interest in technology.

The deal will close in the final quarter of this year and will continue to be backed by their largest shareholder, venture capital group, Delta Partners.

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