Tradeweb closes deal to buy Yieldbroker from ASX-led consortium for A$125 million

Tradeweb Markets Inc. has entered into a definitive agreement to acquire Yieldbroker, a consortium-built infrastructure jointly owned by banks active in local fixed income trading and the Australian Securities Exchange (ASX).

Yieldbroker is the leading Australian trading platform for Australian and New Zealand government bonds and interest rate derivatives covering the institutional, wholesale, and primary segments.

The agreement follows last week’s announcement that Tradeweb offered an all-cash transaction with a purchase price of AUD 125 million. The consortium agreed to the offer and the transaction is expected to close later this year, subject to customary closing conditions and regulatory reviews.

“Value for Australian and New Zealand bond and derivatives customers”

Billy Hult, President of Tradeweb, said: “This is an exciting opportunity for Tradeweb to better serve the participants of a highly attractive and fast-growing fixed income market. We share Yieldbroker’s commitment to client collaboration and continuous innovation, and together we will be even better-positioned to add significant value for Australian and New Zealand bond and derivatives customers. We look forward to providing our clients an even more seamless offering, as they continue to look for greater engagement and connectivity in the international markets.”

Anthony Robson, Chief Executive Officer at Yieldbroker, commented: “We are pleased to join forces with the team at Tradeweb and use our combined resources and expertise to deliver an enhanced trading experience for our customers. Yieldbroker has built an incredibly strong legacy with unrivaled liquidity and coverage for domestic Australian and New Zealand fixed income customers. We look forward to this next chapter for our company and for our clients as part of Tradeweb.”

The acquisition aligns with Tradeweb’s mission to make markets more efficient. Australian institutions, including superannuation (employer-sponsored retirement account) funds, will enjoy enhanced access to Tradeweb’s liquid, global, multi-asset platform.

Tradeweb’s international client base will be able to seamlessly tap into Yieldbroker’s Australian and New Zealand bond and derivative marketplaces, as well as the firm’s reliable pre-trade pricing data offering.

Tradeweb is a global operator of electronic marketplaces for rates, credit, equities and money markets founded in 1996. The company provides access to markets, data and analytics, electronic trading, straight-through-processing, and reporting for more than 40 products to clients in the institutional, wholesale, and retail markets.

ASX owns 43% of Yieldbroker and expects to realize A$55m from sale

ASX owns approximately 43% of Yieldbroker. The remaining shares are owned by a number of domestic and international banks and current and former Yieldbroker employees.

The exchange expects to realize approximately A$55 million (after estimated transaction costs) and the current carrying value of its interest in Yieldbroker is approximately A$30 million.

ASX will recognize a reversal of prior year impairment losses of approximately A$25m after tax as a result of the Proposed Transaction for the financial year ending 30 June 2023. This gain will be classified as a significant item in ASX’s financial reporting framework. The proceeds of the sale will be retained by ASX to support the ongoing operations of the business.

Helen Lofthouse, ASX’s Managing Director and CEO, said: “We believe this transaction will deliver substantial benefits to the Australian market through Yieldbroker and Tradeweb leveraging each other’s innovative trading solutions and deep industry experience. ASX has been a shareholder of Yieldbroker since 2014 and, given the relationship built over the years between the two organisations, ASX will continue to work closely with new owner Tradeweb to help foster long term growth and solutions for customers in the Australian fixed income market.”