Private equity firm Technology Crossover Ventures (TCV) is acquiring a minority stake in US electronic bond trading network MarketAxess for an aggregate purchase price of $35 million.
MarketAxess says after the closing of the transaction, TCV will own approximately 10% of it common stock on a diluted basis.
TCV will receive preferred stock that is convertible in MarketAxess common stock at a conversion price of $10.00 per share. This is a 34% premium to MarketAxess's closing price of $7.49 on Monday.
The private equity firm will also receive 10-year warrants to purchase an additional 700,000 shares of stock at a price of $10 per share.
Under the terms of the investment, TCV will also be able to elect one member to the MarketAxess board of directors.
Commenting on the investment, Richard McVey, chairman and CEO, MarketAxess, says: "This additional capital will allow us to invest in broadening our capabilities while actively managing our balance sheet to build stockholder value. TCV has a long history of success in the financial technology space and we will benefit from their expertise."
MarketAxess also disclosed today that its board of directors has adopted a three-year stockholder rights plan designed to protect the long-term value of the company for its stockholders during any future unsolicited acquisition attempt. The move is designed to deter an investor from acquiring more than a 20% stake in the business without offering "a fair price to all of the company's stockholders".