Tradeweb Completes Acquisition of ICD

Rhea-AI Summary

Tradeweb Markets Inc. (Nasdaq: TW) has completed its $785 million all-cash acquisition of Institutional Cash Distributors (ICD), a leading investment technology provider for corporate treasury organizations. This strategic move adds corporate treasury professionals as Tradeweb's fourth client channel, complementing its existing institutional, wholesale, and retail focus. The acquisition gives Tradeweb access to a $2+ billion addressable market and is expected to be accretive to adjusted earnings per share over the next 12 months.

ICD, one of the largest U.S. institutional money market fund portals, serves over 500 corporate treasury organizations across 65 industries and 45+ countries. As part of Tradeweb, ICD will enhance its offerings with Tradeweb's suite of products, enabling clients to optimize yield, duration, and manage liquidity needs and FX risk. Tradeweb aims to leverage its international presence to accelerate ICD's growth and expansion.

Positive

• Acquisition of ICD for $785 million gives Tradeweb access to a $2+ billion addressable market
• Expected to be accretive to adjusted earnings per share over the next 12 months
• Adds corporate treasury professionals as a fourth client channel
• Potential for cross-selling Tradeweb products to ICD's 500+ corporate clients
• Opportunity to expand ICD's services internationally using Tradeweb's global presence

Negative

• Large cash outlay of $785 million for the acquisition

Financial Analyst

The acquisition of Institutional Cash Distributors (ICD) by Tradeweb Markets Inc. for $785 million in cash is a significant move that expands Tradeweb's client base and market reach. This deal opens up a new $2+ billion addressable market by adding corporate treasury professionals as a fourth client channel. The acquisition is expected to be accretive to Tradeweb's adjusted earnings per share within the next 12 months, indicating potential for immediate financial benefits.

From an investor's perspective, this acquisition presents several positive aspects:

• Market Expansion: Tradeweb gains access to a large and underserved segment of corporate treasurers, diversifying its revenue streams.
• Cross-Selling Opportunities: The integration allows Tradeweb to offer its existing suite of products to ICD's client base, potentially driving additional revenue growth.
• International Growth: Leveraging Tradeweb's global presence could accelerate ICD's expansion into new markets.
• Client Base Enhancement: ICD brings over 500 corporate treasury organizations, including 17% of S&P 100 companies, significantly boosting Tradeweb's client portfolio.

However, investors should also consider potential challenges such as integration costs and the need for smooth technological synergy between the two platforms. The success of this acquisition will largely depend on Tradeweb's ability to effectively cross-sell its products and expand ICD's international presence.

Market Research Analyst

The acquisition of ICD by Tradeweb is a strategic move that reflects broader trends in the financial technology sector. This deal highlights the growing importance of corporate treasury management and the increasing demand for sophisticated liquidity management tools.

Key market implications include:

• Consolidation Trend: This acquisition is part of a larger trend of consolidation in the fintech space, as larger players seek to expand their offerings and capture new market segments.
• Focus on Corporate Clients: The move underscores the growing significance of corporate treasurers as a client base for financial services firms, indicating a shift in market focus.
• Technology Integration: The success of this acquisition will likely hinge on the seamless integration of ICD's technology with Tradeweb's existing platforms, potentially setting a benchmark for future fintech mergers.
• Market Competition: This acquisition may prompt other players in the electronic trading space to seek similar expansions, potentially leading to increased M&A activity in the sector.

For investors, this move signals Tradeweb's commitment to growth and innovation. The company's ability to successfully integrate ICD and capitalize on cross-selling opportunities will be important indicators of the acquisition's long-term value. Moreover, the deal positions Tradeweb as a more comprehensive financial services provider, potentially enhancing its competitive edge in the evolving electronic trading landscape.

NEW YORK--(BUSINESS WIRE)-- Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today announced it has completed its acquisition of Institutional Cash Distributors (“ICD”), an investment technology provider for corporate treasury organizations trading short-term investments. The $785 million, all-cash transaction was announced in April 2024.

With the acquisition of ICD, Tradeweb adds corporate treasury professionals as a fourth client channel, complementing its existing focus on institutional, wholesale and retail clients, and giving it access to a $2+ billion addressable market. Tradeweb expects the ICD acquisition to be accretive to its adjusted earnings per share over the next 12 months.

Tradeweb CEO Billy Hult said: “We are excited to complete the acquisition of ICD and launch corporates as a new client channel, offering a key new avenue for growth and building on our strong presence across our other core markets. Corporate treasurers represent an increasingly large and underserved opportunity within fixed income markets, and ICD’s differentiated technology offers the perfect gateway between corporates and global fixed income markets. The ICD team shares our commitment to continuous innovation and exceptional client service, and it is a pleasure to officially welcome them to Tradeweb.”

As a part of Tradeweb, ICD will provide an increasingly comprehensive solution for corporate treasury organizations worldwide, enhancing its leadership in this space with a range of Tradeweb integration opportunities. In the future, ICD clients will have the ability to optimize yield and duration via Tradeweb’s existing suite of products and partnerships, as well as manage liquidity needs and related FX risk. In addition to cross-selling its products to ICD’s clients, Tradeweb will leverage its international presence to aim to accelerate ICD’s growth and expansion.

ICD is one of the largest U.S. institutional money market fund portals, enabling more than 500 corporate treasury organizations from growth and blue-chip companies (including approximately 17% of the S&P 100 as of December 31, 2023) across 65 industries and more than 45 countries to invest in money market funds and other short-term products to manage liquidity.

About Tradeweb Markets

Tradeweb Markets Inc. (Nasdaq: TW) is a leading, global operator of electronic marketplaces for rates, credit, equities and money markets. Founded in 1996, Tradeweb provides access to markets, data and analytics, electronic trading, straight-through-processing and reporting for more than 50 products to clients in the institutional, wholesale retail and corporate markets. Advanced technologies developed by Tradeweb enhance price discovery, order execution and trade workflows while allowing for greater scale and helping to reduce risks in client trading operations. Tradeweb serves more than 2,500 clients in more than 70 countries. On average, Tradeweb facilitated more than $1.7 trillion in notional value traded per day over the past four quarters. For more information, please go to www.tradeweb.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the federal securities laws. Statements related to, among other things, the potential benefits of the acquisition, our plans, objectives, expectations and intentions regarding ICD, our and ICD’s future performance, the industry and markets in which we and ICD operate, as well as our other expectations, beliefs, plans, strategies, objectives, prospects and assumptions and other future events are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. Risks and uncertainties include, among others, risks related to our ability to successfully integrate ICD’s operations, implement our plans, objectives, expectations and intentions with respect to ICD’s business and realize the expected benefits and synergies from the acquisition. These and other important factors, including those discussed under the heading “Risk Factors” in documents of Tradeweb Markets Inc. on file with or furnished to the SEC, may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this release are not guarantees of future performance and our actual results of operations, financial condition or liquidity, and the development of the industry and markets in which we operate, may differ materially from the forward-looking statements contained in this release. In addition, even if our results of operations, financial condition or liquidity, and events in the industry and markets in which we operate, are consistent with the forward-looking statements contained in this release, they may not be predictive of results or developments in future periods.

Any forward-looking statement that we make in this release speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this release.

Market and Industry Data

This press release includes estimates regarding market and industry data, including addressable market data related to certain corporate treasury activities, that we prepared based on our management’s knowledge and experience in the markets in which we operate, together with information obtained from various sources, including ICD, publicly available information, industry reports and publications, surveys, our clients, trade and business organizations and other contacts in the markets in which we operate. In presenting this information, we have made certain assumptions that we believe to be reasonable based on such data and other similar sources and on our knowledge of, and our experience to date in, the markets in which we operate. While such information is believed to be reliable for the purposes used herein, no representations are made as to the accuracy or completeness thereof and we take no responsibility for such information.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801596448/en/

Media:

Daniel Noonan, Tradeweb

+1 646 767 4677

Daniel.Noonan@Tradeweb.com



Investors:

Ashley Serrao, Tradeweb

+1 646 430 6027

Ashley.Serrao@Tradeweb.com

Sameer Murukutla, Tradeweb

+1 646 767 4864

Sameer.Murukutla@Tradeweb.com

Source: Tradeweb Markets Inc.

FAQ

What company did Tradeweb (TW) acquire and for how much?

Tradeweb (TW) acquired Institutional Cash Distributors (ICD) for $785 million in an all-cash transaction.

How will the ICD acquisition affect Tradeweb's (TW) earnings?

Tradeweb expects the ICD acquisition to be accretive to its adjusted earnings per share over the next 12 months.

What new market does the ICD acquisition open up for Tradeweb (TW)?

The acquisition adds corporate treasury professionals as Tradeweb's fourth client channel, giving it access to a $2+ billion addressable market.

How many corporate treasury organizations does ICD serve?

ICD serves more than 500 corporate treasury organizations across 65 industries and over 45 countries.

What percentage of S&P 100 companies use ICD's services as of December 31, 2023?

Approximately 17% of the S&P 100 companies use ICD's services as of December 31, 2023.