Tradeweb Markets, a leading operator of electronic marketplaces for rates, credit, equities, and money markets, announced it has entered into a definitive agreement to acquire Institutional Cash Distributors (ICD), an institutional investment technology provider for corporate treasury organizations trading short-term investments, for $785 million, subject to customary adjustments. The purchase price is expected to be funded with cash on hand.
By acquiring ICD and its proprietary technology, Tradeweb will add a new and fast-growing client channel that serves corporate treasury professionals, complementing Tradeweb’s existing focus on institutional, wholesale, and retail clients. Launched in 2003, ICD enables more than 500 corporate treasury organizations from growth and blue-chip companies (including about 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.
ICD is one of the largest U.S. institutional money market fund portals. Last year, it had average daily balances of more than $230 billion. And the company has a stable and loyal client base, with 99% client retention and an exceptional net promoter score.
ICD’s flagship products include ICD Portal and ICD Portfolio Analytics. The ICD Portal is a one-stop shop to research, trade, analyze, and report on investments across 40+ available investment providers, primarily offering money market funds and access to other short-term products, including deposits, fixed-term funds, and separately managed accounts (SMAs). And Portfolio Analytics is an AI-driven cloud solution for aggregating positions across a corporate treasury’s entire portfolio for analysis and reporting.
Under Tradeweb, ICD will provide a comprehensive solution for corporate treasurers and asset managers worldwide to manage short-term liquidity needs and FX risk, as well as optimize yield and duration via Tradeweb’s existing suite of products. And ICD clients will retain the ability to fully integrate their workflows with leading third-party treasury management and accounting systems and ICD’s portfolio analytics solution. Along with the opportunities to cross-sell Tradeweb’s products to ICD’s clients, Tradeweb will aim to drive ICD’s growth and expansion by leveraging Tradeweb’s international presence and offering money market funds to Tradeweb’s existing network of clients globally.
Upon closing the deal, ICD’s CEO, Tory Hazard, will report to Tradeweb President Thomas Pluta and join Tradeweb’s operating committee.
The deal is expected to accretive to Tradeweb’s adjusted earnings per share in the first 12 months following closing and meet Tradeweb’s return on invested capital objectives. Subject to customary closing conditions and regulatory review, the transaction is expected to be completed in the second half of 2024.
J.P. Morgan Securities served as the lead financial advisor to Tradeweb. Morgan Stanley also provided advice. Fried, Frank, Harris, Shriver & Jacobson served as legal advisor. Parthenon Capital Partners was the primary investor in ICD. And Raymond James and Moelis & Company served as its financial advisors, and Kirkland & Ellis served as its legal advisor.
KEY QUOTES:
“ICD is an exceptional opportunity to acquire a leading investment platform for corporate treasurers, a fast-growing channel within fixed income markets and a strong strategic fit for Tradeweb. Acquiring ICD will further diversify our client and business mix, advancing our track record of expanding into adjacent markets to improve client workflows. As part of Tradeweb, ICD will also be positioned to drive the adoption of electronic trading for corporate treasurers. We look forward to welcoming the talented ICD team onboard, who share Tradeweb’s unwavering commitment to delivering innovative products and extraordinary service, and to jointly creating even greater value for our clients and shareholders.”
– Tradeweb CEO Billy Hult
“We could not have found a better partner than Tradeweb to continue providing innovative technology and exceptional service to our clients. This acquisition will enable ICD clients to have integrated access to Tradeweb’s fixed income marketplace, while continuing to trade through our existing technology. The combined offering delivers even more of what corporate treasury wants, and together, we will be able to unlock the full potential of our technology.”
– ICD’s CEO Tory Hazard
