KCG Holdings (KCG) to be acquired by Virtu Financial (VIRT)

KCG Holdings (KCG) to be acquired by Virtu Financial (VIRT) for $20.00/share in cash or approx. $1.4 bln

 

KCG was born out of the merger of Knight Capital and Getco, two pioneers of using computer technology for rapid-fire trading who joined forces in 2012 after a trading glitch nearly put Knight out of business.

The move comes as persistently low levels of volatility in financial markets are squeezing industry players. High-speed groups thrive during times of heavy trading and high volatility, with the period around the financial crisis having been the boom time.

Virtu trades primarily for its own account, like Getco, whereas KCG also has big business trading for clients — part of the Knight arm thought to be attractive to Virtu. It is one of the largest players in wholesale trading where companies execute trades for retail houses such as Charles Schwab and TD Ameritrade.

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