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Screenshot of a breaking news alert e-mail from Q2 2017
LeapRate Exclusive… LeapRate has learned, via a series of filings made with the US Securities and Exchange Commission (SEC), that IT services and solutions company Computer Sciences Corporation (NYSE:CSC) paid $110 million for the acquisition of Fixnetix, a start-up in the ultra-low latency market data space.
CSC had announced the acquisition in August, closed the deal in September, but at the time had stated that it was not disclosing the terms of the acquisition.
Fixnetix provides market data, trading access, liquidity venue connectivity and pre-trade risk management for market makers, investment banks, hedge funds and proprietary trading houses globally. By facilitating low latency, resilient and secure trading, Fixnetix enhances operational efficiencies for electronic trading communities. In the FX space, Fixnetix has worked with clients such as ADS Securities and 7Hedge.
LeapRate has learned that the purchase price included an upfront cash payment of $88 million (net of $1 million of cash acquired) paid at closing, plus the estimated fair value of ‘contingent consideration’ of $21 million. The estimated amount of contingent consideration is based on a contractually defined multiple of Fixnetix’s revenues during two specified periods, as well as other considerations. The range of possible outcomes for the final fair value of the contingent consideration is between $0 to $26 million – such that the actual total purchase price could vary from $88 million to $114 million.
A portion of the earnout is expected to be paid on the first anniversary of the acquisition date (i.e. September 25, 2016), and the remainder is expected to be paid on the second anniversary of the acquisition date (i.e. September 25, 2017). The acquisition was funded from CSC’s existing cash balances. CSC incurred transaction costs of under $1 million associated with the acquisition.
The largest shareholder in Fixnetix was venture capital firm Delta Partners, which had invested in the company at start-up.
LeapRate had also recently reported that former Fixnetix CTO Matt Dangerfield had joined FXecosystem in a similar role. FXecosystem provides outsourced connectivity services for the FX market, providing optimised network solutions for trading infrastructures.