London equities, derivatives and FX trading house ODL Securities has bought bestconnect, an electronic dealing service aimed at retail stockbrokers, private banks and private client investment managers, from investment bank Dresdner Kleinwort.
Financial terms of the deal were not disclosed, but according to press reports ODL paid around £5 million for the bestconnect system.
As part of the deal, the business will begin to transfer to ODL on a phased basis with the aim it will be fully migrated by 30 June.
Key Dresdner Kleinwort staff, who currently manage the business, will also transfer to ODL Securities. The broker says the bestconnect team, led by Andrew Rowland, brings with them a wide range of skills required to run and grow an advanced algorithmic execution business.
Bestconnect offers electronic deal-at-quote and limit order executions as well as traditional sales trading execution services in more than 8000 tradable instruments including UK, US and European equities, investment trusts, ETFs, covered warrants and index certificates.
ODL says it will become the UK's second largest RSP following the acquisition. The deal also gives its existing clients access the deal-at-quote and limit order capability of the bestconnect platform, as well as a broader product range and service offering. In addition, the acquisition gives ODL the opportunity to cross-sell its Forex, CFD and derivatives products to bestconnect's traditional customer base.
ODL says it also intends to use bestconnect to facilitate its entry into other new financial product areas - reportedly the retail spread-betting market - in the future.
Says Graham Wellesley, chief executive of ODL Securities: "In addition to widening our product offering to our existing clients, it will allow us to gain closer working relationships with an important and active client community in the financial markets and brings us a sophisticated technology platform to help us enter new markets internationally."
The sell-off is part of a back office shake-up at Dresdner Bank by its parent company Allianz that is expected to generate savings of EUR600 million at the bank by 2008.