Target: Eze Castle
Price: $1 billion
Sellers: GTCR and Bank of New York Mellon Corp.
Financial Adviser: Goldman Sachs
Goldman Sachs is advising on the process. The deal includes the Eze Castle business and RealTick, one banker said. The unit generates about $80 million EBITDA. A sale of Eze Castle is expected to fetch north of $1 billion, sources said.
Large private equity firms, such as Kohlberg Kravis Roberts & Co., TPG Capital and Advent International, are expected to be interested in Eze Castle, bankers said. Strategic buyers, including the New York Stock Exchange or the Nasdaq, could also be involved, as well as Thomson Reuters, sources said. Thomson Reuters is publisher of Buyouts.
New York-based ConvergEx, a financial industry software company, was formed in 2006 when Eze Castle Software combined with BNY Mellon’s institutional businesses. GTCR and BNY Mellon invested at the time. In 2010, ConvergEx acquired the RealTick EMS business and LDB Consulting for about $88 million, according to an SEC filing.
Eze Castle provides trading software mainly for hedge funds. RealTick offers an EMS platform used by more than 1,000 institutional clients.
The sale of Eze Castle comes after GTCR and BNY Mellon failed to unload ConvergEx last year. In May 2011, ConvergEx filed to go public in an IPO that could have raised as much as $400 million. The company, at the same time, also pursued a sale in a dual track offering. Goldman Sachs also advised on the ConvergEx sale.
ConvergEx pulled its IPO when it announced plans the following July to sell itself to CVC Capital Partners in a $1.9 billion deal. The sale ended up failing. In late 2011, ConvergEx pulled the deal, partly due to an investigation from U.S. regulators. The SEC and the Department of Justice were probing some non-electronic trade execution practices conducted through ConvergEx’s Bermuda unit, Reuters reported at the time.
GTCR and BNY Mellon each own 33.2 percent of the ConvergEx business, according to a May 2011 regulatory filing. GTCR has invested $150 million over time in ConvergEx, sources have told peHUB.
Officials for ConvergEx and Goldman declined comment. GTCR and BNY Mellon couldn’t be reached for comment.
(Luisa Beltran is a senior writer for peHUB.)