Tradeweb Markets Inc. (NASDAQ:TW), a global operator of online markets for interest rates, credit, equities and money markets, today announced that it has entered into a definitive agreement to acquire the institutional investment technology of Institutional Cash Distributors, LLC (ICD). provider of corporate cash organizations that trade in short-term investments, for $785 million, subject to customary adjustments.
The purchase price is expected to be financed in cash.
With the acquisition of ICD and its powerful, proprietary technology, Tradeweb will add a new and rapidly growing client channel serving corporate treasury professionals, complementing Tradeweb’s existing focus on institutional, wholesale and retail clients.
Founded in 2003, ICD enables more than 500 growth and blue-chip corporate funds (including approximately 17% of the S&P 100 as of December 31, 2023) across 65 industries and more than 45 countries to invest in equity money market and other short-term products for liquidity management. ICD is one of the largest gateways of US institutional money market funds and in 2023 had an average daily balance of over $230 billion. The company has a stable, growing and loyal customer base, with 99% customer retention and an excellent net referral rating.
ICD’s flagship products include ICD Portal and ICD Portfolio Analytics. The portal is a one-stop service for investment research, trading, analysis and reporting across more than 40 available investment providers offering primarily money market funds and access to other short-term products including deposits, fixed-term funds and segregated management accounts (SMAs ). Portfolio Analytics is an AI-powered cloud solution for aggregating positions across a corporate fund’s portfolio for analysis and reporting.
As part of Tradeweb, ICD will provide a comprehensive solution to corporate treasurers and asset managers worldwide to manage short-term liquidity needs and currency risk, as well as optimize performance and duration through Tradeweb’s existing product line. ICD customers will retain the ability to fully integrate their workflows with leading third-party treasury management and accounting systems and ICD’s portfolio analytics solution.
In addition to opportunities to cross-sell Tradeweb’s products to ICD clients, Tradeweb will seek to accelerate the growth and expansion of ICD by leveraging Tradeweb’s international presence and offering money market capital to Tradeweb’s existing network of clients worldwide.
Tradeweb CEO Billy Hult said:
“ICD is an excellent opportunity to acquire a leading investment platform for corporate treasurers, a fast-growing channel in the fixed income markets and a strong strategic fit for Tradeweb. The acquisition of ICD will further diversify our customer and business mix, furthering our track record of expanding into adjacent markets to improve customer workflows.
As part of Tradeweb, ICD will also be positioned to drive the adoption of electronic transactions for corporate treasurers. We look forward to welcoming the talented ICD team on board, who share Tradeweb’s unwavering commitment to deliver innovative products and exceptional service, and together create even greater value for our customers and shareholders.”
Upon closing of the transaction, ICD CEO Tory Hazard will report to Tradeweb President Thomas Pluta and join Tradeweb’s Operating Committee.
Mr Azar said:
“We could not have found a better partner than Tradeweb to continue to provide innovative technology and excellent service to our customers. This acquisition will allow ICD clients to have comprehensive access to Tradeweb’s fixed income market while continuing to trade through our existing technology. The combined offering offers even more than what the corporate fund wants and together, we will be able to unlock the full potential of our technology.”
The acquisition is expected to be accretive to Tradeweb’s adjusted earnings per share in the first 12 months following closing and meet Tradeweb’s return on invested capital targets. Completion of the transaction is expected in the second half of 2024, subject to customary closing conditions and regulatory review.