Citigroup Inc. has agreed to buy Automated Trading Desk, a Mount Pleasant company that builds systems for automated stock trading, for about $680 million in cash and stock, Citi announced today.
Citi will pay $102.6 million in cash and about 11.17 million shares of its stock, according to the announcement. The deal is expected to close in the third quarter and needs regulatory approval.
ATD, as the company is known, is a leader in electronic market making and proprietary trading, Citi said. It has about 120 broker-dealer customers and trades more than 200 million shares a day on average. It currently handles about 6% of trading volume in National Market System stocks, and in 2006 it accounted for about 6% of all New York Stock Exchange volume and 6% of all Nasdaq volume, according to the announcement.
ATD will keep its headquarters in Mount Pleasant and will operate as a unit of Citi’s global equities business. Steven Swanson, ATD’s chief executive, will stay on as CEO and lead the global expansion of Citi’s electronic market making, according to the announcement.
“Citi offers ATD a unique opportunity to utilize our technology in both domestic and international markets,” Swanson said. “The combination of our businesses will position us as a leader amid the rapid evolution of global market structure.”
Citi said ATD’s network of broker-dealer customers will add to its base of institutional, broker-dealer and retail clients, and that it plans to take ATD’s technology to markets around the world.
“The combination of Citi’s Global Equities business and ATD will create a leading U.S. stock trading platform,” said James Forese, head of global equities at Citi.
The purchase is the latest in a series of Citi deals in electronic and alternative trading, including Lava Trading, Knight’s options market making business, TD Waterhouse Capital Markets and the OnTrade electronic communications network.
Financial Technology Partners advised ATD and gave its board a fairness opinion, and Blank Rome was ATD’s primary legal counsel. Citi Markets & Banking advised Citi, with Skadden, Arps, Slate, Meagher & Flom as its primary legal counsel.
