KCG pushes into Europe with Neonet acquisition

Neonet purchase will help KCG expands its footprint in continental European markets.

KCG has agreed to buy Swedish agency broker Neonet for an undiclosed sum.

The deal will see KCG buy-out existing shareholders Hay Tor Capitaal, KAS Bank and Cidron Delfi Intressenter Holding.

Neonet was founded in 1996 as an electronic trading specialist brokerage and was acquired by technology group Orc in 2010 but was demerged from Orc just two years later after a private equity buy-out of Orc.

In 2013, former head of electronic trading at Citi, Tim Wildenberg, took over as CEO, saying he intended to put the firm “back on the map”. It since underwent reorganisation to focus on its core electronic execution and algo offerings.

Commenting on today’s announcement, Wildenberg said: “We are excited to join forces with KCG, an established market leader in global execution services. For the last 20 years, Neonet has focused on putting clients first and providing them with transparent execution services, as well as deep knowledge of international financial markets. We look forward to leveraging KCG’s significant expertise across asset classes in the U.S. and Europe for the benefit of our clients worldwide for years to come.”

KCG said the deal will strengthen its reach in continental Europe and give clients of both firms access to a wider range of execution services.

“Neonet’s sophisticated technology, experienced trading desks, and deep team of execution specialists are highly complementary to our existing execution services and will help accelerate the growth of our agency client business,” said Philip Allison, CEO of KCG Europe.

The deal is subject to regulatory approval and is expected to close later this year. Wildenberg will continue at the top of Neonet and the company will remain at its Stockholm HQ.

KCG said there are cost savings to be gained through consolidating various aspects of the two businesses which will be “slightly” accretive to earnings in 2017.