TP ICAP acquires energy and commodities brokerage firm Axiom

Maria Nikolova

The deal continues the expansion of TP ICAP’s Energy & Commodities division and reinforces its existing presence in Houston, Texas.

Leading wholesale market intermediary TP ICAP PLC (LON:TCAP) has earlier today announced the acquisition of energy and commodities brokerage firm Axiom.

In a filing with the London Stock Exchange, TP ICAP says it acquired Axiom Refined Products, LLC, Atlas Commodity Markets, LLC, Atlas Petroleum Markets, LLC, and Atlas Physical Grains, LLC.

Axiom, which is headquartered in Houston, Texas, and has an office in Chicago, has 22 brokers and specialises in crude oil, refined oil products, ethanol and physical grains. It is being sold by its founding partners and senior management. They will all remain with the business after the sale and continue to build it.

Axiom will become part of TP ICAP’s Energy & Commodities division which provides high value services, including pre-trade information, market intelligence and brokerage services to clients. The acquisition continues the expansion of the Energy & Commodities division’s product range and execution expertise, and reinforces TP ICAP’s presence in Houston, Texas.

The initial consideration for the acquisition is $15.1 million in cash. In addition, deferred non-contingent consideration of $3.1 million will be paid over three years and a further $10.9 million of deferred contingent consideration may be payable dependent upon the performance of the business over the same timeframe. These subsequent payments will be satisfied through cash payments.

For the year to end-December 2017, Axiom made pre-tax profit of US$5.3 million. At December 31, 2017. Axiom had gross assets of US$7.4 million.

TP ICAP’s Energy & Commodities revenue for the four months to October 31, 2018, was in line with the prior year period, and 2% lower year to date on a constant currency basis, with market conditions remaining challenging across the majority of TP ICAP’s Energy & Commodities products, the company said in a trading statement.

On the brighter side, the Data & Analytics business saw strong revenue growth in the period of 11%, and 7% year to date on a constant currency basis, as the business has benefitted from strategic changes implemented by its new management. Institutional Services revenue grew by 12% in the period and 7% year to date on a constant currency basis with COEX in particular seeing significant growth.

TP ICAP forecasts the outcome for the full year to be in line with its guidance.

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