Toronto-based firm will help the US company’s aim to build one of the world’s largest global securities and derivatives trading networks
The Canadian fintech that operates the NEO securities exchange is to be acquired by a US firm.
Toronto-based Aequitas Innovations, Inc. will become part of Cboe Global Markets, Inc. as the Chicago-headquartered firm aims to build one of the world’s largest global securities and derivatives trading networks.
NEO comprises a fully registered Tier-1 Canadian securities exchange with a diverse product and services set ranging from corporate listings to cash equity trading. It also operates NEO Connect, provides a distribution platform supporting mutual funds, private funds and private corporates.
Its acquisition will allow Cboe to enhance its Canadian equities operations with the NEO Exchange offering trading, listings, and other services, alongside the MATCHNow alternative trading platform that the US firm acquired last year.
The combination is expected to give Cboe a 16.5% market share at close, which is likely to be in the first half of 2022, pending regulatory review.
“Adding NEO to the Cboe network better enables us to create a first-class equities offering in Canada, bolstering our global markets in North America, Europe and Asia Pacific, and bringing us one step closer to our vision of building one of the world’s largest global derivatives and securities trading networks,” said Ed Tilly, Chairman, President and CEO of Cboe Global Markets.
Developing innovation
For NEO, the acquisition will facilitate greater expansion of its offering for Canadian firms, focused on the innovation economy.
“We are excited to draw upon Cboe’s core strengths as a leading global market infrastructure provider to further develop innovative solutions that meet the needs of investors and capital-raisers around the world,” said Jos Schmitt, president and CEO of NEO. “Our commitment to innovation, fairness and putting investors and capital-raisers first will not only continue under Cboe’s ownership, but now benefit from the strength and support of Cboe’s technology, market expertise and global client distribution.”
Terms of the deal were not disclosed, however, the company noted that the purchase price is not material from a financial perspective and expects it to be nominally accretive.
