BMO Financial Group announced that it has entered into a definitive agreement to acquire Clearpool Group Inc., a New York -based provider of holistic electronic trading solutions and an independent agency broker-dealer operating in the U.S. and Canada. The transaction is subject to receipt of required regulatory approvals and other customary conditions and is currently expected to close in the calendar second quarter. Terms were not disclosed.
The transaction delivers powerful new capabilities to BMO's electronic trading platform. As the nature of equity trading shifts to increased emphasis on electronic trading, the acquisition of Clearpool demonstrates BMO's commitment to delivering leading edge trading technology to its global client base.
Founded in 2014, Clearpool has approximately 60 employees and over 100 clients, primarily U.S. broker dealers who utilize the company's trading technology and execution services. Its Algorithmic Management System (AMS) provides a fully customizable suite of algorithmic trading tools designed to service the best execution needs of institutional clients. Clearpool is a 2019 Waters Rankings Winner – Best Algorithmic Trading Provider and a recipient of the 2019 Markets Choice Awards – Best Algorithmic Trading Company.
"BMO Capital Markets is accelerating on our strategic priorities of delivering exceptional client-experiences, driving an innovation mindset, activating a high performance culture and simplifying how we do business," said Dan Barclay , CEO, BMO Capital Markets. "The acquisition of Clearpool is consistent with these priorities as it gives us access to leading next-gen trading technology and a broker-dealer client base."
On closing, Clearpool will be a separate broker-dealer with information barriers to secure clients' confidential information.
"Clearpool's business was built on providing transparency and control to all market participants," said Aine O'Flynn , Managing Director and Head of Global Equity Products, BMO Capital Markets. "We are committed to maintaining those principles."
"We are very excited to join BMO," said Joseph Wald , CEO and Co-Founder, Clearpool. "The acquisition positions us well to accelerate the next step in our platform development and provide the infrastructure to become a global, multi-asset class electronic trading solution. None of this would be possible without our employees, clients, and advocates who continue to shape our vision of transparency and collaborative trading solutions."
Electronic trading is a rapidly growing portion of the global equity secondary commission/fee pool. A 2018 report by Greenwich Associates estimates that 73% of global equity flows are executed electronically and for more liquid developed markets, the rate is likely over 90%.
In connection with the transaction, BMO Capital Markets acted as financial advisor and Debevoise & Plimpton LLP and Osler, Hoskin & Harcourt LLP acted as legal counsel to BMO. Financial Technology Partners acted as financial advisor and Morgan, Lewis, & Bockius LLP, Murphy & McGonigle and Stikeman Elliott LLP acted as legal counsel to Clearpool.