Icap buys out GovPX for $13 million

UK inter-dealer broker Icap is buying out the outstanding shares in GovPX, a US fixed-income and derivatives data provider, for $13 million, it was announced last week.

Icap was one of the original shareholders in GovPX, which was formed by a consortium of inter-dealer brokers and major bond dealers in 1990. A number of GovPX products also include Icap data.

Icap plans to run GovPX as a separate company within its information division, which is led by John Nixon, global head of the information business. GovPX chief executive Lawrence Leuzzi will continue in that role, and GovPX’s products will continue to be distributed as they are now through a network of distributors and direct to customers.

The deal comes as the consortium agreement was due to expire at the end of 2005 or early 2006. Leuzzi said GovPX’s board formed a special committee to determine the company’s future, as it was clear that the goals of the consortium — particularly with regards to price transparency - had been achieved.

"Given the degree of transparency that had opened up in the market-place and the fact that we were well on our way into a new era, GovPX as a consortium... was going to be better served in moving into a more traditional private corporate role," he said.

Leuzzi said the deal will allow GovPX to continue as-is under Icap’s umbrella. The deal will also provide GovPX with a range of new data. "This is going to give us a wealth of information to create new products to meet the changing needs in the market-place," Leuzzi said.

Icap, in turn, will be able to supplement its wholesale data services with retail offerings. "Sometimes [Icap’s structure] doesn’t allow us to get specialised in things that we know that the end-user client would desire to have," said Ivette Collazo, director of market data at Icap in the US. "GovPX presents an opportunity to amalgamate or gather additional data that the market-place might like to see."

Collazo said the deal, which has closed, should not affect staff because there are few areas of overlap. However, Angelo Susi, head of information and technology at GovPX, has decided to leave the company. Mitch Haviv, Susi’s second in command, will take over.

GovPX had total revenues of $15.3 million in 2004 and has working capital of $2.3 million.

Leuzzi said that over the past 15 years, GovPX has paid out more than $100 million in dividends and royalties to its shareholders.