Trading exchange, Chi-X Asia Pacific, which operates the second-largest exchange in Australia, has been sold to Cboe Global Markets.
The transaction was expected to close in the second or third quarter of 2021 and a sum was not disclosed, but Cboe said it planned to fund the transaction with cash on hand, supplemented by existing credit agreements.
Cboe said the deal would provide it with a single point of entry into Australian and Japanese markets as well as expanding its global equities business.
Headquartered in Hong Kong, Chi-X Asia Pacific operated exchanges in Japan and Australia and had a technology service and development arm Chi-X Global Technology Philippines. Chi-X was Australia’s second-largest exchange with an 18% market share.
David Howson, currently president of Cboe’s European operations, would lead the expansion and be promoted to president, Europe and Asia Pacific. Vic Jokovic would remain as chief executive of Chi-X Australia.
It was previously owned by private investment firm J.C. Flowers which acquired the firm in February 2016 and the firm said consolidated gross revenue had grown 85% under J.C. Flowers thanks to technology enhancements.
Thierry Porté, managing director of J. C. Flowers, said: “In the course of this investment, J.C. Flowers deployed capital, technology, and human resources to create significant market positions in equity-related trading in the important markets of Japan and Australia.
“We are gratified to see these efforts recognized by Cboe, which is known globally for offering cutting-edge trading and investment solutions. We are confident that Chi-X Asia Pacific will continue to grow to the benefit of the marketplaces and their participants."
Ed Tilly, chief executive at Cboe Global Markets, said: “With the planned acquisition of Chi-X Asia Pacific, we continue to execute on our growth strategy by broadening our geographic and asset class presence, while enabling the further extension of our product offerings to our global network of customers.
“This is an exciting investment in attractive, growing markets that will complement our North American and European operations and provide a foothold in the key Asia Pacific region, positioning us to become a truly global marketplace for our customers. In a short number of years, the Chi-X Asia Pacific team has built their business into one of the largest market operators in Asia Pacific. We look forward to working with them to accelerate the company’s further growth, building on our shared cultures of innovation and customer-first approach as we aim to bring greater choice to investors in Asia Pacific.”