Acquisition of Hotspot FX by BATS for $365 Million


The highly rumored acquisition of Hotspot FX by BATS Global Markets, earlier this month has been irrevocably announced today.

28 January, AtoZForex – KCG Holdings Inc., a financial services provider that owns the cited foreign exchange trading platform, has finally come to terms with BATS Global Markets for the sale of Hotspot FX at a sum of $365million in cash. Detailed aspects were provided, anticipating that the deal will be finalized over the course of Q2 2015.

For BATS Global Markets there are various distinctive motives behind the determination of acquiring Hotspot FX. Foremost, as a strategic act, Hotspot would secure and assist BATS Global market in obtaining a valuable position within the foreign exchange industry. Additionally, through the act of adding Hotspot FX to their portfolio, BATS Global Markets will gain access to eminent instruments, since the FX firm will deliver know how, experience, technology proficiency, insightful personal, but most of all their distinctive global presence.

When assessing the other party involved, it can be clearly concluded that KCG is highly favorable for the furtherance of the acquisition. Especially, when this deal will enhance the value for the Shareholders of KCG. The exact increase of value was published in their official statement: “Transaction is expected to increase KCG’s tangible book value by approximately $2.00 per share”

Reasons for acquisition of Hotspot FX by BATS

Apart from this tangible benefit Daniel Coleman, the CEO of KCG, also expressed his satisfactory opinion upon the acquisition of Hotspot FX. As he commented in an official press release on KCG’s website, the following:

“After conducting a thorough and competitive process, it became clear that BATS is the right strategic partner for Hotspot, as well as its clients and employees. BATS and Hotspot share a commitment to technological excellence. This, coupled with the experience, resources and insights derived from operating global multi-asset class markets, ensures that BATS is well positioned to further accelerate Hotspot’s growth.”

Last but not least, sharing a set of tax benefits – deal increase over 3 years, amounting to about $70 million over the specified period, anticipated to add $2.00 per share to KCG Holdings value.

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