Telecoms firm Colt has agreed to buy a majority stake in trading technology company MarketPrizm, with current owner Instinet maintaining a minority interest.
Under the deal, Colt will not pay an upfront price for its stake but has committed to fund MarketPrizm "through its next stage of growth" hitting Ebitda by up to EUR10 million in 2011.
Colt says that the deal boosts its presence in the financial services sector and helps move it deeper into the managed services area of an industry increasingly looking to third party providers to slash IT costs.
MarketPrizm was initially introduced to the market in 2009 by Chi-X Global technology unit Chi-Tech, and pitched as an exchange-neutral multi-venue access gateway to European trading destinations.
Colt says a combination of MarketPrizm's expertise in market data and trading infrastructure services with its own strength in low latency networks, and proximity hosting services "will provide the unique foundation necessary to address the increasingly demanding requirements of trading firms".
MarketPrizm will be run by Colt veteran Tanuja Randery, who previously led the global business division. Current CEO John Lowrey will continue to provide "strategic oversight" and be a member of the MarketPrizm board.
Rakesh Bhasin, CEO, Colt, says: "Providing market data and trading infrastructure services is a natural step for Colt as we pursue our vision of becoming Europe's leading information delivery platform. With our strong existing financial services customer base, this transaction will extend Colt's finance sector capability and presence and create new opportunities to provide trade execution services to clients in equities and other asset classes in Europe and Asia."