Knight Trading Group to Acquire Direct Trading Institutional, A Direct Market Access Firm
April 04 2005 - 7:30AM
PR Newswire (US)
Knight Trading Group to Acquire Direct Trading Institutional, A
Direct Market Access Firm All-cash transaction to establish Direct
Trading as a separate broker-dealer of Knight offering direct
market access to institutional clients JERSEY CITY, N.J., April 4
/PRNewswire-FirstCall/ -- Knight Trading Group, Inc. (NASDAQ:NITE)
today announced that it has agreed to acquire the business of
Direct Trading Institutional, Inc., a privately held firm
specializing in providing institutions with direct access trading
through an advanced electronic platform. Direct Trading, based in
Irving, Texas, offers hedge funds and other institutions direct
market access through a platform designed to provide superior
access to multiple execution venues without the need for multiple
systems on the trading desk. Direct Trading allows clients to post
orders directly to ECNs and Nasdaq's SuperMontage; utilize order
functionality of all ECNs and exchanges; reduce transaction and
market impact costs; and integrate options and futures
capabilities. Clients also have access to an agency execution desk
and third-party research and execution through soft dollar
programs. In 2004, Direct Trading traded more than 2.5 billion
over-the-counter and listed shares. Thomas M. Joyce, Chairman and
Chief Executive Officer of Knight Trading Group, said, "Direct
market access is one of the fastest growing parts of the
institutional trading business, and we are very excited to acquire
Direct Trading, which has distinguished itself as a leader in this
segment. At Knight, we are focused on delivering the finest
combination of technology and human capital to the trading process.
Direct Trading enhances our ability to achieve that goal. As we
move ahead over the next several months, we will utilize Direct
Trading as the foundation for our Electronic Services offering."
Mark D. Gulis, Co-Founder and Managing Director of Direct Trading
Institutional, said, "We are extremely excited about Direct
Trading's new partnership with Knight and the benefits that
institutions will enjoy from this relationship. Our clients will
now be able to utilize the breadth of services, capabilities and
scale that Knight brings to the trading business in addition to the
existing direct market access and trading services we presently
offer. With Knight's support, Direct Trading can continue to
enhance our offering and expand our business." Direct Trading will
maintain its brand and business model, and it will operate as a
separate broker-dealer subsidiary of Knight under the direction of
Derek N. Stein, Executive Vice President. Upon completion of the
acquisition, Direct Trading will be a core client offering in
Knight's newly created Electronic Services Group, headed by Mr.
Stein. Direct Trading will retain all employees and maintain its
headquarters in Irving, Texas, with primary sales offices in New
York, San Francisco and Denver. Mr. Gulis and President William F.
Cronin will remain with Direct Trading and become employees of
Knight. Co-Founder and Chief Executive Officer Allan P. Peterson
expects to retire from the company following the close of the
transaction. Mr. Joyce said, "Knight is carefully establishing
Direct Trading as an independent provider of direct market access.
Executions through Direct Trading occur with complete impartiality
across all execution venues, and because Direct Trading does not
engage in proprietary trading, institutions can achieve the
anonymity and low market impact they seek from a superior direct
market access product. Allan and Mark have built a terrific
business, and we look forward to taking it to the next level as we
combine Direct Trading's clients and products with Knight's
abundant liquidity." Financial terms of the all-cash transaction
were not disclosed. The close of the transaction is subject to a
number of conditions, including the receipt of appropriate
regulatory approvals, which are expected to take up to six months
to complete. The acquisition is expected to be accretive in 2005.
The advisers to Knight on the deal were Sandler O'Neill &
Partners and Skadden, Arps, Slate, Meagher & Flom LLP. The
advisers to Direct Trading were Putnam Lovell NBF and Jones Day.
Knight will release its first quarter results on Wednesday, April
20, 2005, at 6:00 a.m. Eastern Daylight Time (EDT). The company
will conduct its first quarter earnings conference call for
analysts, investors and the media at 9:00 a.m. EDT that same day.
The conference call will be Webcast live at 9:00 a.m. EDT for all
investors and interested parties on Knight's Web site
http://www.knight.com/. In addition, the company will release its
monthly volume statistics for March 2005 on its Web site before the
start of trading that same day. About Knight Knight is a leading
provider of comprehensive trade execution and asset management
services. Our Equity Markets business offers institutions and
broker-dealers high quality trade execution and capital commitment
across the depth and breadth of the equity market. Our Asset
Management business, Deephaven Capital Management, is a
market-neutral investment manager focused on delivering
risk-adjusted returns with low volatility for institutions and high
net worth individuals. Knight strives to be a valued partner by
providing superior service and continually enhancing its offering
to meet client needs. About Direct Trading Institutional Direct
Trading was founded in 1997 to provide institutional investors
better trade executions and lower trading costs. We now provide
execution sert are trading in excess of 2 billion shares per year.
We offer a full-service trading desk as well as "Soft Dollar"
programs to improve returns and lower operating costs. Certain
statements contained herein constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are based on current
expectations, estimates and projections about the Company's
industry, management's beliefs and certain assumptions made by
management. Readers are cautioned that any such forward-looking
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that are difficult
to predict. Since such statements involve risks and uncertainties,
the actual results and performance of the Company may turn out to
be materially different from the results expressed or implied by
such forward-looking statements. Given these uncertainties, readers
are cautioned not to place undue reliance on such forward-looking
statements. Unless otherwise required by law, the Company also
disclaims any obligation to update its view of any such risks or
uncertainties or to announce publicly the result of any revisions
to the forward-looking statements made herein; however, readers
should carefully review reports or documents the Company files from
time to time with the Securities and Exchange Commission including,
without limitation, the risks and uncertainties detailed under the
headings "Certain Factors Affecting Results of Operations" and
"Risks Affecting our Business" in the Company's Annual Report on
Form 10-K. DATASOURCE: Knight Trading Group, Inc. CONTACT: Margaret
Wyrwas, Senior Managing Director, Corporate Communications &
Investor Relations, +1-201-557-6954, , or Kara Fitzsimmons, Vice
President, Corporate Communications, +1-201-356-1523, , or Greta
Morley, Vice President, Marketing Communications & Public
Relations, +1-201-557-6948, , or Molly McDowell, Analyst, Corporate
Communications & Investor Relations, +1-201-356-1723, , all of
Knight Web site: http://www.knighttradinggroup.com/
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