CVC Dropped Acquisition of Convergex


ConvergEx Inc., a trading-software company partially owned by Bank of New York Mellon Corp., announced last month that its July agreement to be bought by CVC Capital Partners Ltd. was terminated amid regulatory investigations of its Bermuda unit.

According to Convergex, investigations by the U.S. Securities and Exchange Commission and the Department of Justice mainly involve certain non-electronic trade-execution practices by a Bermuda-based ConvergEx Global Markets unit, which was expected to produce 7 percent of revenue in 2011.

Convergex said it was conducting an internal review as the audit and risk committee of the board hired outside counsel.

CVC Capital Partners, a London-based buyout firm that oversees a 10.8 billion-euro ($14.1 billion) fund, would have become the largest owner of ConvergEx under the deal announced July 20. The buyout may have been valued at $1.9 billion.

ConvergEx posted revenue of $610 million in 2010 and earnings before interest, taxes, depreciation and amortization, excluding certain items, of $162 million. The company, which sells software to handle trading and risk management, also functions as a broker-dealer. Westminster Research Associates and Convergex, which are prominent in the commission management space, are subsidiaries.

In May, Convergex had filed with the SEC to raise as much as $400 million in an initial public offering.


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