CBOE Holdings, Inc. CBOE inked a deal to acquire the market data services and trading analytics platforms of Livevol, Inc. for an undisclosed amount. The board of directors of both the companies has approved the deal and it is expected to close by the end of this month.
The acquisition will be funded with existing cash. Although the buyout it is not expected to be of significance in terms of revenues or earnings for 2015, the company anticipates it to be accretive in 2016.
Per the deal, the securities exchange will acquire Livevol’s trading analytics platforms like Livevol Core, Livevol Pro and Livevol X, along with Livevol Enterprise and other market data solutions products. However, the company's broker-dealer unit – Livevol Securities, Inc. – has been excluded from the agreement. Upon completion, all of Livevol's 17 employees will join CBOE Holdings and all the acquired properties will become its subsidiaries.
The acquisition of Livevol – a leading provider of equity and index options technology and market data services – will expand CBOE Holdings' presence in the market data services business significantly. Also, the transaction will benefit CBOE Holdings as the customization of Livevol’s data and analytics capabilities will allow customers to have a better understanding of its products and services. This is expected to result in an increase in the number of customers, thereby leading to the company’s top-line growth.
CBOE Holdings compelling inorganic growth and strategic focus to expand globally may prompt analysts to raise its earnings estimates, resulting in a possible rank upgrade. Currently, the company carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks from the broader finance sector include Qiwi plc QIWI, Global Payments Inc. GPN and JetPay Corporation JTPY. While Qiwi plc sports a Zacks Rank #1 (Strong Buy), both Global Payments and JetPay hold a Zacks Rank #2 (Buy).
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