Dash Financial Effects Management Buyout03.08.2018 By Rob Daly Editor-at-Large
Co-founders Peter Maragos and David Karat in conjunction with private equity firm Flexpoint Ford plan a management buy-out of options execution and technology provider Dash Financial Technologies, which is owned by private equity firm GTCR.
Under the terms of the deal, which is expected to close sometime next quarter, Maragos will maintain his role as CEO while Steven Begleiter, a managing director at Flexpoint Ford, will join the board as non-executive chairman. Daniel Edelman, a principal at Flexpoint Ford, also will join the firm’s board.
After the transaction closes, there will be no additional changes to management or staff, according to a Dash spokesperson.
The buy-out is about partnering with a financial sponsor who shares the firm’s passion for the business and has a similarly long-term time horizon, according to Maragos.
“This will allow us to pursue both organic and inorganic growth strategy,” he said. “That could include expanding into new product areas, asset classes, and geographies, as well as potentially pursuing adjacent acquisitions, similar to the highly successful LiquidPoint merger we did last year.”
Dash Financial merged with agency broker Convervegex’s LiquidPoint’s options trading and technology business in March 2017 to form Dash Financial Technologies. GTCR, which owned a controlling interest in Convergex, helped design the deal.
Once the parties complete the management buy-out, GTCR will complete its investment in Dash Financial, which it acquired through the Liquidpoint merger.
The new owners have no immediate plans to take the company public since there is no need for additional capital, according to the Dash spokesperson.
In the coming months, Dash expects to launch multiple products as well as overhaul its OEMS platform, routing network, and options ATS, according to Maragos.
“We’ve been fortunate to have a successful seven-year run so far, and believe that we are primed to now take the business to the next level,” he added.
The deal should boost the firm's LME operations in Germany, say officials.
The deal entails the acquisition of three of the firm's brokerage businesses.
Schwab estimates a $1.8B to $2B run-rate expense synergies within three years of the deal's close.
The acquisition extends the vendor's SaaS offerings to private debt markets.
The purchase should bolster the firm's trading technology and quantitative research.