Penson Worldwide announced yesterday that it has reached an agreement with Knight Capital Group, Inc. (NYSE Euronext: KCG) regarding the sale of certain assets and liabilities of the futures division of Penson’s U.S. broker-dealer subsidiary, Penson Financial Services, Inc. (PFSI). The deal, subject to standard closing conditions and regulatory approvals, is projected to close in the second quarter of 2012. PFSI’s futures division services over 60 introducing brokers, high frequency traders, hedgers, non-clearing FCMs, professional traders, and exchange members.
As consideration for the transfer of certain assets and liabilities of the futures division, Penson will receive $5 million at closing. A portion of the $5 million will be held until the transfer of certain exchange seats or memberships. In addition to this lump sum, earn-out payments will be made to Penson based on the performance of the futures division over the next three years. Management at Penson anticipates the total amount of consideration will result in a small gain on the entirety of the sale.
Knight will receive customer futures positions and segregated funds and collateral, and foreign exchange positions and margin. Customers will not be inconvenienced by a change in access to their positions and accounts as a result of the transfer, and the transfer will not require any technology conversions or updates. Current management of Penson’s futures division will remain in place, and through a transition services agreement, Penson will continue to service its introducing brokers and customers. The vast majority of futures division employees are expected to make the transition to Knight. Additional details will be provided in further Penson filings with the Securities and Exchange Commission.
“Knight provides accounts with a stable, well-capitalized, independent platform and it will be ‘business as usual’ for futures customers,” said Philip A. Pendergraft, CEO of Penson Worldwide. “This transaction represents an ideal solution for our futures introducing brokers, customers, and related counterparties, as well as for our other stakeholders. As previously announced, we continue to work on other strategic transactions in both the US and Canadian markets.”
“We’re pleased to expand Knight’s capabilities in futures,” says Thomas M. Joyce, Chairman and Chief Executive Officer, Knight Capital Group. “We’ll continue Penson’s work to enhance the client experience through advanced trading technologies and superior service.”
For further information, please visit www.penson.com
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