Business
BGC Announces Agreement to Sell its Insurance Brokerage Business to The Ardonagh Group for $500 Million
Transaction Expected to Close in the second half of 2021 NEW YORK, May 26, 2021 /PRNewswire/ -- BGC Partners, Inc. (Nasdaq: BGCP) ("BGC"), a leading global
About this update from Bgc Group, Inc.
[{"type":"text","content":"Transaction Expected to Close in the second half of 2021\n\n\nNEW YORK, May 26, 2021 /PRNewswire/ -- BGC Partners, Inc. (Nasdaq: BGCP) (\"BGC\"), a leading global brokerage and financial technology company, announced today that it has entered into an agreement to sell its Insurance Brokerage business for $500 million of cash consideration to The Ardonagh Group Limited (\"Ardonagh\"). \nMANAGEMENT COMMENTS:\nHoward W. Lutnick, Chairman and Chief Executive Officer of BGC, said: \"The agreement to sell our Insurance Brokerage business for $500 million reflects the significant value we have created since entering this market in 2017. Like our previous sales of eSpeed and Trayport, as well as our IPO and tax-free spin-off of Newmark, this sale further demonstrates our commitment to driving shareholder value. \nWhile 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. \nArdonagh 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.\nWhile our Insurance Brokerage business provided less than 10 percent of BGC's total revenue over the trailing twelve-months1, the $500 million of cash that we expect to receive represents over 17 percent of BGC's fully diluted market capitalization2. \nThe 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.\"\nMr. Lutnick, concluded: \"We have been clear and consistent about our plans to express the value of BGC's assets. This transaction demonstrates our commitment to increase shareholder value and focus our interest on Fenics, which we believe represents the greatest opportunity for our Company.\" \nPROPOSED TRANSACTION DETAILS AND...