Market Insider

KCG shares jump on news of buyout by securities trading firm Virtu Financial

Key Points
  • Virtu Financial will acquire KCG Holdings for approximately $1.4 billion.
  • This represents a premium of 46 percent on the stock price, from when media reports first began circulating on this deal.
  • Shares of both companies were trading in green territory Thursday following this announcement.
Virtu agrees to buy KCG holdings for $20/share in cash
Virtu agrees to buy KCG holdings for $20/share in cash

Shares of securities trading firm KCG Holdings closed up more than 11 percent Thursday after it was announced the company is being acquired by New York-based Virtu Financial for approximately $1.4 billion.

Shares of Virtu also closed up 10 percent on Thursday after the news.

The deal was first reported by CNBC on Wednesday evening, and KCG later released a statement on the acquisition Thursday morning, along with its quarterly earnings.

@davidfaber: Virtu deal to acquire KCG Holdings is $20 all cash. Virtu also expected to announce large capital raise with deal-sources.

The $20 per-share purchase price represents a premium of 46 percent over KCG's closing share price of $13.73 on March 14, prior to the circulation of media reports of this deal. KCG's closing share price on Thursday was $19.75 per share.

"After a thorough evaluation, KCG's Board of Directors concluded that the proposal from Virtu provides compelling value for KCG's stockholders," KCG Chairman Charles Haldeman said in a statement.

The deal, which was unanimously approved by Virtu's board of directors, is expected to close during the third quarter this year, the companies added. Following the close of the transaction, Virtu Chief Executive Douglas Cifu will lead over the combined company.

"Virtu and KCG both have a heritage of using technology to make markets more efficient," Cifu said in a statement. "... there is immediate opportunity for revenue growth and significant cost savings."

On Thursday, KCG reported first-quarter sales of $255.4 million, topping a Thomson Reuters consensus estimate of $249.4 million.

As of Thursday's close, shares of KCG have climbed 57 percent over the last 12 months are up more than 49 percent year-to-date.

KCG 12-month performance

Source: FactSet

— CNBC's David Faber contributed to this report.