Message #9 From:
Stock News Bot Date: June 30, 2006 05:24:00 AM
BK News GTCR Announces Agreement to Invest in Leading Agency Brokerage and Technology Company
CHICAGO--(BUSINESS WIRE)--June 30, 2006--GTCR Golder Rauner, LLC, a leading private equity firm, announced today that it will join forces with The Bank of New York Company, Inc. (NYSE:BK) and Eze Castle Software, a major provider of trade order management and related technologies, to form BNY ConvergEx Group, LLC. BNY ConvergEx will be a leading global agency brokerage and technology company offering a complete spectrum of pre-trade, trade and post-trade solutions for traditional money managers, hedge funds, broker-dealers, corporations and plan sponsors. The company's comprehensive suite of services, advanced technology offerings and breadth of distribution channels will enable its customers to manage all aspects of the trade cycle including idea generation, research, analysis, trading and execution, risk management, compliance, and portfolio management.
The company had pro forma 2005 revenues of approximately $340 million and is experiencing attractive growth in revenues and profitability. BNY ConvergEx will have a strong capital base to support its future growth.
GTCR, in conjunction with GTCR Fund VIII, LP and other affiliates, is partnering with a management team led by Joseph M. Velli, senior executive vice president of The Bank of New York, to form the new company, of which Velli will serve as both Chairman and CEO. The Bank of New York and the GTCR affiliates will own equal stakes in the new enterprise, with the balance held by Eze Castle Software's investors and BNY ConvergEx's management team. BNY ConvergEx will combine the expertise of BNY Securities Group, a global institutional agency brokerage organization and a leading provider of trade execution, commission management, independent research, and transition management services, with Eze Castle Software, a provider of technology solutions for all aspects of the investment management process including portfolio analysis, order creation, execution, compliance, and settlement. In addition, The Bank of New York's B-Trade and G-Trade businesses are expected to become part of BNY ConvergEx Group in 2008, although in the interim they will be continue to be owned by The Bank of New York.
Velli's substantial experience in the financial services arena includes more than twenty years at The Bank of New York, where he has served as head of global issuer services, consumer banking, custody administration, and the Company's global marketing and sales group. In 1992 he was elected to Executive Vice President, the youngest to attain this position in the company's history. He is currently Senior Executive Vice President with responsibility for the Bank's Execution and Clearing Services Sector, which includes the agency brokerage business and Pershing, LLC, the world's largest correspondent clearing firm that was acquired and integrated into BNY Securities Group in 2003.
"We are thrilled to partner with The Bank of New York, Joe Velli, Eze Castle CEO Tom Gavin and management of both companies to form a new company that will leverage the complementary strengths of BNY Securities and Eze Castle," said Collin Roche, Principal at GTCR. "We believe BNY ConvergEx will be well-positioned to participate in strong growth and technological innovation in the securities industry as management works to better integrate the investment and trading workflow. The Bank of New York is a premier participant in the securities industry, and we are flattered to work with them on this important initiative."
"The dynamic, ongoing evolution of the financial marketplace has created the need for flexible, innovative technology solutions providers," said Velli. "By partnering with GTCR and Eze Castle, we can create an entrepreneurial organization that will move quickly to enhance and expand our product offerings, leveraging our collective experience and market leadership to create superior growth."
"I am very excited to join forces with GTCR and The Bank of New York," said Tom Gavin, CEO of Eze Castle Software. "Our team at Eze Castle is pleased to be joining with BNY Securities Group to harness the combined power of our two firms. Our industry-leading trade order management capabilities have helped investment management firms worldwide to automate their investment processes and we look forward to providing an even broader suite of investment technology solutions as part of BNY ConvergEx."
The transaction highlights GTCR's unique method of identifying and partnering with exceptional management teams to build dominant companies in high-growth industries, a strategy which it pioneered and has implemented successfully for more than 25 years.
Legal counsel for the transaction included Kirkland & Ellis LLP advising GTCR, Sullivan & Cromwell LLP advising The Bank of New York, and Nixon Peabody LLP advising Eze Castle.
About The Bank of New York
BNY Securities Group is the global institutional agency brokerage organization of The Bank of New York Company Inc. BNY Securities Group businesses included in BNY ConvergEx are BNY Brokerage Inc. (member NYSE, NASD, SIPC), Lynch, Jones & Ryan, Inc/ (member NASD, SIPC), G-Port, Westminster Research Associates, Inc. (member NASD, SIPC) and BNY Jaywalk Inc. BNY Brokerage is a premier institutional agency brokerage firm that provides full-value brokerage solutions to institutional asset owners, asset managers, and broker-dealers worldwide. It offers a full range of execution services, including specialized global transition management capabilities, commission management services, research and wholesale services. Lynch, Jones & Ryan, a subsidiary of BNY Brokerage, is a pioneer and global leader in commission recapture, providing services to over 2,000 funds worldwide with assets totaling more than $3 trillion. G-Port provides electronic global trading, liquidations and transitions. Westminster Research is a broker-dealer providing access to independent research coupled with a unique multiple trading approach to execution. BNY Jaywalk is a leading provider of independent research.
The Bank of New York Company, Inc. (NYSE:BK) is a global leader in providing a comprehensive array of services that enable institutions and individuals to move and manage their financial assets in more than 100 markets worldwide. The Company has a long tradition of collaborating with clients to deliver innovative solutions through its core competencies: securities servicing, treasury management, asset management, and private banking. The Company's extensive global client base includes a broad range of leading financial institutions, corporations, government entities, endowments and foundations. Its principal subsidiary, The Bank of New York, founded in 1784, is the oldest bank in the United States and has consistently played a prominent role in the evolution of financial markets worldwide. Additional information is available at www.bankofny.com.
About Eze Castle Software
Since 1995, Eze Castle Software (ECS) has provided investment management firms with cutting-edge technology solutions to automate the investment process. With over 260 clients and offices in Boston, New York, San Francisco, Stamford, and London, Eze Castle Software is one of the largest order management product firms in the industry. Eze Castle Software's Product Suite provides multi-strategy global investment managers with the technology to support multi-asset-class order management, compliance, portfolio modeling, electronic trading, third-party data integration, mobile connectivity, real-time p/l, and commission management. For information about the company please visit our web site at www.ezecastlesoftware.com
About GTCR Golder Rauner, LLC
Founded in 1980, GTCR Golder Rauner, LLC is a leading private equity investment firm and long-term strategic partner for outstanding management teams. The Chicago-based firm pioneered the investment strategy of identifying and partnering with exceptional executives to acquire and build companies through a combination of acquisitions and strong internal growth. GTCR currently manages more than $8 billion of equity capital invested in a wide range of companies and industries. More information about GTCR may be found at www.gtcr.com.
