Thomson Reuters Corp. will spend $625-million to buy FX Alliance Inc. in a move to boost its electronic currency-trading platform.
The Toronto-based financial news and information company said Monday it would acquire all of the New York-based company's shares in a cash deal.
The deal allows FX Alliance to add to its base of more than 1,000 institutional clients around the world, and will provide a possible source of growth for Thomson Reuters, which has seen its shares slump over the past 12 months as its key trading platform struggles in the market.
It has been a challenging year for Thomson Reuters, which took a $3-billion non-cash goodwill charge as it acknowledged the difficulties it was having as it tried to get its data terminals and services in front of bankers and traders.
Its stock has rebounded about 6 per cent since January, and it has made forays into the market to buy companies it feels will help it compete better with rival services such as those offered by Bloomberg. Last month it acquired Zawya Ltd., which specializes in Islamic finance, focusing on the Middle East and Northern Africa.
Thomson Reuters said the deal would make it easier for traders to track deals. FX Alliance provides 24-hour-a-day access to foreign exchange markets. Last week, the company said it posted a record total average daily trading volume of $98.6-billion (U.S.) in June.
FX Alliance's largest shareholder, Technology Crossover Ventures, agreed to tender its holdings and the board recommended other shareholders also sign up.
Thomson Reuters, which provides news and information to financial, legal, accounting and health care professionals, said the deal would likely close in the third quarter.
"This combination will enable us to provide our customers with integrated management of trades though the entire life cycle," delivering the benefits of a more streamlined trading process and more efficient execution," said Thomson Reuters managing director Abel Clark.