Potential from transaction ‘considerable’:
London Stock Exchange to acquire MillenniumIT
The London Stock Exchange Group plc (LSE) has agreed to acquire
MillenniumIT, a Sri Lankan-based technology services company serving the
capital markets industry.
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CEO of
MillenniumIT
Tony Weeresinghe |
Chief
Operating Officer
of MillenniumIT
Dr Anush Amarasinghe |
Highlights
* Brings broad range of IT development expertise within the Group
* Provides Group with new, high performance trading platform
* Creates new revenue stream for Group
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MillenniumIT’s high performance technology will provide the Group
with a highly scalable and very low latency in-house developed trading
system with multi-asset class functionality and quicker time to market.
In addition, the transaction will give MillenniumIT the backing of the
Group to enable it to develop further its global exchange technology
business.
MillenniumIT will retain its culture of innovation and creativity,
build on its commercial operations and continue serving its clients,
with its CEO, Tony Weeresinghe, reporting directly to Xavier Rolet.
“Improving our technology and increasing our competitive position in
the fast-moving trading environment is vital.
This transaction enables the Group to implement a new, more agile,
innovative and efficient IT capability for our future business
development as well as running a new cash trading platform which will
provide substantially lower latency, significantly higher capacity and
improved scalability.
“It will also offer cost saving opportunities in the future and give
the Group a footprint in Asia.
“MillenniumIT is a proven business, already serving multiple clients
in multiple geographies, including some of the best known in their
fields. The potential from this transaction is considerable for both
parties.”
CEO of MillenniumIT, Tony Weeresinghe said, “This transaction with
London Stock Exchange Group is a tribute to the innovative culture of
our company, the quality of our technology solutions and our deep pool
of talented staff.
The Group’s backing gives us the resources to continue supporting our
customers, expanding the company into other markets and investing for
the future.”
Director of Information and Technology, London Stock Exchange Group,
David Lester said, “MillenniumIT is a leader in developing low cost high
performance trading platforms and financial markets software. Going
forward, they will be the Group’s in-house software development team,
gradually replacing our current suppliers and bringing intellectual
know-how and properties fully within the company.
We are excited that by the end of 2010 their proven trading platform
will provide our clients with sub-millisecond trading latencies, giving
the Group a very fast, multi-product, cost efficient scalable trading
platform. The transition will be carefully managed, with further
enhancements to TradElect planned in the interim.”
The Group will begin migrating clients to MillenniumIT’s trading
system from the end of 2010, replacing TradElect, Infolect, and other
interfaces.
The new platform will allow the Group to enrich its functionality, in
particular for Italian clients, with the possibility of accommodating
trading after hours and stop loss orders.
IT development and operational costs for the Group will be reduced,
resulting in estimated annual cost savings of at least 10 million
Sterling Pounds from FY2011-12.
Depreciation of investment in the current TradElect trading platform
will be accelerated as a result of the transaction, and further planned
upgrades that take place in the interim will be taken as operating
expenses in the period they occur.
In total, these are expected to represent non-recurring incremental
costs of 25 million Sterling Pounds in FY2010.
Under the terms of the Offer, the Group has offered to acquire 100
percent of MillenniumIT’s shares for cash consideration with a share
alternative.
It is estimated that 73 percent of the total deal consideration will
be paid in cash, with the rest in new LSEG shares to be issued.
The Group has already received irrevocable undertakings representing
over 90 percent of the shares in MillenniumIT.
The transaction is expected to complete by the middle of next month,
subject to satisfaction of all conditions to the Offer and receipt of
all clearances.
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