01—Abstract
Summary
Summary of the 8-K filed April 8, 2024. Cited figures are marked; the original filing is the authoritative source.
On April 5, 2024, Tradeweb Markets LLC, a subsidiary of Tradeweb Markets Inc., entered into a Purchase and Sale Agreement to acquire all outstanding equity interests of ICD Intermediate Holdco 1, LLC and two blocker entities for $785 milliona in cash, subject to customary adjustments for cash, indebtedness, net working capital and transaction expenses.
ICD, Institutional Cash Distributors, LLC, is an institutional investment technology provider for corporate treasury organizations. Tradeweb also expects to issue $4.5 millionb of Class A common stock to an equityholder of the ICD Seller as restricted stock under its 2019 Omnibus Equity Incentive Plan at closing. The closing is subject to customary conditions, including expiration of HSR Act waiting periods, certain approvals from FINRA, the UK Financial Conduct Authority and the Portuguese CMVM, and the absence of a material adverse effect on the ICD Group.
Either side may terminate if closing has not occurred by April 5, 2025. Tradeweb anticipates closing in the second half of 2024. The Buyer obtained representation and warranty insurance, subject to exclusions and policy limits.
In its April 8, 2024 press release (furnished as Exhibit 99.1), Tradeweb said the deal adds a fourth client channel for corporate treasury professionals and an estimated $2c+ billion addressable market. The company stated the acquisition is expected to be accretive to adjusted earnings per share in the first 12 months after closing and to meet its return on invested capital objectives. The press release describes ICD as having more than 500 corporate treasury clients and average daily balances of more than $230 billion in 2023.
02—Key points
Key Highlights
- Tradeweb Markets LLC agreed to acquire ICD Intermediate Holdco 1, LLC and two blocker entities for $785 million in cash, subject to customary adjustments.
- Tradeweb expects to fund the purchase price with cash on hand, according to the press release.
- Tradeweb will issue $4.5 million of Class A common stock to an equityholder of the ICD Seller as restricted stock at closing.
- ICD serves more than 500 corporate treasury organizations and had average daily balances of more than $230 billion in 2023, per the press release.
- Tradeweb says the deal adds a fourth client channel (corporate treasury) and an estimated $2+ billion addressable market.
- Closing requires HSR Act clearance and approvals from FINRA, the UK FCA and the Portuguese CMVM; outside date is April 5, 2025, and closing is anticipated in the second half of 2024.
- The acquisition is expected to be accretive to adjusted earnings per share in the first 12 months after closing.
03—Questions
Frequently Asked Questions
How much is Tradeweb paying for ICD and how will it be funded?
Tradeweb Markets LLC will pay $785 million in cash to the Sellers, subject to customary adjustments for cash, indebtedness, net working capital and transaction expenses. The press release states the purchase price is expected to be funded with cash on hand.
What does ICD do?
ICD, Institutional Cash Distributors, LLC, is described as an institutional investment technology provider for corporate treasury organizations. Its flagship products are ICD Portal, a platform for researching, trading and reporting on money market funds and other short-term products, and ICD Portfolio Analytics, an AI-driven cloud solution for aggregating and analyzing treasury positions.
When is the deal expected to close and what could prevent it?
Tradeweb anticipates closing in the second half of 2024. Closing is subject to conditions including HSR Act waiting period expiration, approvals from FINRA, the UK Financial Conduct Authority and the Portuguese CMVM, the absence of a governmental restraining order, and the absence of a material adverse effect on the ICD Group. Either the Sellers or the Buyer may terminate if closing has not occurred by April 5, 2025.
What is the financial impact expected for Tradeweb shareholders?
The press release states the acquisition is expected to be accretive to Tradeweb's adjusted earnings per share in the first 12 months following closing and to meet Tradeweb's return on invested capital objectives.
Will Tradeweb issue new shares in connection with the deal?
Yes. At the Acquisition Closing, Tradeweb will issue and sell $4.5 million of Class A common stock to an equityholder of the ICD Seller. The shares will be restricted stock subject to vesting and forfeiture terms under the Tradeweb Markets Inc. 2019 Omnibus Equity Incentive Plan.
04—Continue