ASX has entered into a binding agreement to sell 100 per cent of its interest in exchange provider Yieldbroker to a wholly-owned subsidiary of Tradeweb Markets.
The market operator first acquired a 49 per cent shareholding in Yieldbroker for $65 million in late 2014, of which it still owns approximately 43 per cent.
In a statement on Thursday, the ASX said the remaining shares are owned by a number of domestic and international banks, as well as current and former Yieldbroker employees.
Moreover, the ASX confirmed it expects to realise approximately $55 million (after estimated transaction costs) under the terms of the proposed transaction. The current carrying value of its interest in Yieldbroker is approximately $30 million.
Furthermore, ASX said it will recognise a reversal of prior year impairment losses of approximately $25 million after tax as a result of the proposed transaction for the financial year ending 30 June 2023, and noted the proceeds of the sale will be retained by the ASX to support the ongoing operations of the business.
Speaking on the deal, ASX managing director and chief executive, Helen Lofthouse, said: “We believe this transaction will deliver substantial benefits to the Australian market through Yieldbroker and Tradeweb leveraging each other’s innovative trading solutions and deep industry experience.”
“ASX has been a shareholder of Yieldbroker since 2014 and, given the relationship built over the years between the two organisations, ASX will continue to work closely with new owner Tradeweb to help foster long term growth and solutions for customers in the Australian fixed income market,” Ms Lofthouse continued.
In late April, Yieldbroker announced Tradeweb was in advanced discussions to acquire 100 per cent of its shares for a $125 million purchase price, on a cash-free, debt-free basis and assuming a normalised level of working capital.
“This is an exciting opportunity for Tradeweb to better serve the participants of a highly attractive and fast-growing fixed income market,” commented Tradeweb CEO Billy Hult.
“We share Yieldbroker’s commitment to client collaboration and continuous innovation, and together we will be even better-positioned to add significant value for Australian and New Zealand bond and derivatives customers.”
“We look forward to providing our clients an even more seamless offering, as they continue to look for greater engagement and connectivity in the international markets,” Mr Hult concluded.
According to Tradeweb, the all-cash transaction is expected to close later this year, subject to customary closing conditions and regulatory reviews.