US-based agency broker and financial technology provider ConvergEx has signed a definitive agreement to buy Cogent Consulting, a supplier of commission management solutions to institutional money managers and broker-dealers.
Terms of the deal were not disclosed, although the transaction is expected to close on or before 2 November.
The acquisition will expand the scope of ConvergEx’s commission management services suite and provide the broker’s clients with a neutral, anonymous solution to manage their trading and research commissions.
The announcement follows a failed attempt by seven unnamed sell-side firms to purchase Cogent in May this year. The consortium intended to developing Cogent’s commission payment platform, CSA Trak, to enable buy-side firms to manage multiple commission balances through a single portal.
Although stating that discussions with the sell-side firms were “positive”, Robin Hodgkins, CEO and founder, Cogent Consulting said at the time: “In the end we could not agree terms and decided that it was in everybody’s best interests to get back to our day jobs.”
Following completion of the deal with ConvergEx, Hodgkins will remain as Cogent’s CEO, reporting to John Meserve, executive managing director, ConvergEx.
“As the commission management space evolves, demand is growing for a full-service solution that encompasses every aspect of the commission management process. Money managers are increasingly looking for an independent platform to simplify and manage their relationships with hundreds of brokers and third party research providers,” said Meserve, in a statement. “ConvergEx now offers the preeminent end-to-end commission management solution, which provides our clients with a best practices and compliant approach to managing their commissions.”
“We are very excited to be joining the ConvergEx team,” added Hodgkins. “Together, we believe our technologies will set the standard for commission management solutions, from broker vote to allocation and reporting of commission spend and finally to payments.”