TP ICAP acquires agency broker Coex Partners in £7.1m deal

TP ICAP has acquired independent agency broker Coex Partners for an initial payment of £7.1m, it announced on Thursday.

The FTSE 250 firm said Coex, which has offices in London, Paris and New York with 55 brokers, was founded in 2014 and provides trade and execution services in listed derivatives and over-the-counter foreign exchange to hedge funds, assets managers and other clients.

It was being sold by its management, with founders and senior management members John Ruskin and Alex Gerskowitch set to remain with the business and continue to build it.

“TP ICAP and Coex began working together in 2016 and the acquisition is a natural progression of that successful collaboration,” the TP ICAP board said in its statement.

“Coex will become part of TP ICAP's institutional services division which provides high value services, including pre-trade information, market intelligence and intermediation to its clients. The acquisition continues the expansion of the institutional services division's specialist execution expertise and product range.”

TP ICAP said the initial payment for the acquisition - including the settlement of existing shareholder loans - was £7.1m in cash, with performance-related payments possible at various dates during the next four years.

Those subsequent payments would be satisfied through the issue of new ordinary shares in TP ICAP or cash, at the discretion of the company.

For the year to 31 December 2016, Coex made profits before tax of £2.1m, with gross assets of £6.5m. Its revenues for the six months to 30 June 2017 were £11m.

Coex entered into an appointed representative agreement with TP ICAP in June 2016, and since that date its revenues had been included in the consolidated revenues of the TP ICAP Group.

House corporate broker Numis said it does not expect to make any material changes to its estimates given the acquisition's profits, "but we view it as a useful acquisition as it looks to build out its Institutional Services division".