May 26, 2021 7:58 AM
Howard W. Lutnick, Chairman and Chief Executive Officer of BGC, said: "The agreement to sell our Insurance Brokerage business for
While we have built an exceptional Insurance Brokerage business, this sale will focus our resources on Fenics. We expect to use the proceeds to accelerate Fenics growth and to repurchase shares and/or units.
Ardonagh is an excellent partner to continue our Insurance Brokerage business. The combined platform will add to their strength, capability, and create the world's leading independent specialty insurance broker.
While our Insurance Brokerage business provided less than 10 percent of BGC's total revenue over the trailing twelve-months1, the
The sale proceeds will provide additional capital to accelerate Fenics growth, which increased 40 percent year-over-year in the first quarter of 2021. Additionally, our Fenics Growth Platforms, which include Fenics UST, Fenics GO, Lucera, Fenics FX, and other newer standalone platforms, grew more than 82 percent over the same period. While the growth of our Insurance Brokerage business was industry-leading, we believe the scale and scope of the Fenics opportunity is far greater, with potential to drive shareholder value materially higher."
PROPOSED TRANSACTION DETAILS AND FINANCIAL IMPACT:
Under the terms of the purchase agreement, Ardonagh will acquire the equity of the entities that comprise BGC's Insurance Brokerage business3. BGC will receive
The transaction is expected to close in the second half of 2021, subject to customary closing conditions, including the receipt of required regulatory approvals.
The one-time gain associated with the transaction will be reflected in BGC's consolidated results under
BGC's Insurance Brokerage business contributed approximately
BGC intends to use the proceeds from the sale to invest in its Fenics business, to repurchase BGC shares and/or units, and for general corporate purposes.
BGC's customers include many of the world's largest banks, broker-dealers, investment banks, trading firms, hedge funds, governments, corporations, and investment firms. BGC's Class A common stock trades on the NASDAQ Global Select Market under the ticker symbol "BGCP". BGC is led by Chairman of the Board and Chief Executive Officer
Discussion of Forward-Looking Statements about BGC
Statements in this document regarding BGC that are not historical facts are "forward-looking statements" that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. These include statements about the effects of the COVID-19 pandemic on the Company's business, results, financial position, liquidity and outlook, which may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected. Except as required by law, BGC undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see BGC's
1 Trailing twelve-month period ending
2 Calculated using BGC's closing stock price on
3 Includes Ed Broking Group Limited and
4 Includes interest and dividend income and other revenues.
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