01.23.2012

Exchanges Broaden Scope

01.23.2012
Terry Flanagan

TMX Group has made another key acquisition as it awaits the fate of its proposed takeover by a consortium of banks and financial institutions.

The operator the Toronto Stock Exchange and the Montreal Exchange has acquired substantially all of the assets of ir2020, a stateside data analytics and customer relations management software provider. The company’s product offering will be integrated into TMX’s suite of products and services and be made available to all listed companies on the TSX and TSX Venture.

“A key strategic focus for TMX Group over the last several years has been to diversify its revenue streams,” Richard Simon, director of corporate development at TMX Group told Markets Media. “There has been an increased emphasis on exchanges leveraging their core capabilities as a provider of technology solutions to the capital markets.”

This is the latest move from the TMX to broaden its scope in recent months, as exchanges have further gone out of their core business of matching trades. In late December, TMX announced that it had taken a 16% minority stake in the Bermuda Stock Exchange, making it one of the largest shareholders of the offshore exchange.

Prior to that, it acquired Sydney, Australia’s Razor Risk Technologies, which provides credit risk software to clearing houses, stock exchanges, financial institutions and brokerages.

TMX Group has also provided the Boston Options Exchange and the London Stock Exchange Group’s Pan-European derivatives markets with technology for their respective market places. “We intend to grow this aspect of our business by continuing to invest in existing and new technological solutions,” said Simon.

TMX Group in November entered into a support agreement with proposed suitor Maple Group regarding a deal for all of TMX’s outstanding shares, in a transaction valued at $3.8 billion. Under the deal, Maple has agreed to pay TMX a reverse termination fee of $39 million if the transaction fails due to regulatory concerns.

Maple’s bid current expires on Jan. 31, but it is open to extending it to April 30 if regulators don’t give approval by the end of the month.

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