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Silver Lake Backs Virtu/Madison Tyler Merger

The merger will reposition Virtu Financial into the top slot in the market maker space.

Financial technology developer Virtu Financial has agreed to merge with electronic trading firm Madison Tyler Holdings. The deal terms were not disclosed but it will be supported by technology investment firm Silver Lake.

Credit Suisse, Bank of America Merrill Lynch and Barclays Capital are acting as joint lead arrangers and bookrunners for the debt financing.

Silver Lake, which manages more than $14 billion in capital, is well known for investing in strong management teams of financial services and technology based businesses. Ameritrade, Instinet, Interactive Data Corporation, IPC, Island, Mercury Payment Systems, NASDAQ OMX, and SunGard are among the firm’s prior financial services and technology investments.

Madison Tyler is a market maker on a number of exchanges and electronic marketplaces in equities, fixed income, currencies and commodities. Its market making lowers costs for both retail and institutional investors who trade on public securities and commodities exchanges, and supplies the liquidity necessary for the public to trade and invest.

Virtu’s proprietary financial market technologies comes with a broad range of efficient applications and tools that makes it easy to market data distribution, surveillance, risk management, clearing and price formation across asset classes. The company provides liquidity and execution services to a wide range of businesses within the financial market.

The combination of Virtu and Madison Tyler will give the business a leading spot among the ranks of financial technology companies worldwide. US-based Citadel, GETCO, and Hudson River Trading and Amsterdam-based IMC and Optiver currently sit at the top of trading firms.

Industry veteran and Virtu’s current chairman and CEO Vincent Viola, will continue to run the company under the Virtu Financial name.

Paul, Weiss, Rifkind, Wharton & Garrison advised Virtu in the transaction on legal matters. Silver Lake was advised by Simpson Thacher & Bartlett, Goodwin Procter and Rosenblatt Securities Inc., who served as an industry advisor.

Madison Tyler was advised by Moelis & Company and Irell & Manella. Madison Tyler's management members were advised by Gibson, Dunn & Crutcher.

 

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