Private equity group to acquire majority stake in Refco

Boston-based private equity group Thomas H Lee Partners (THL) will acquire a majority stake in Refco, a New York-based financial services firm involved in derivatives execution and clearing, as well as a provider of prime brokerage services for fixed income and foreign exchange markets.

Although full financial details of the agreement were not disclosed, the deal values the group at approximately $2.25 billion. THL is expected to make an investment to acquire a 57% stake in the company. It has yet to gain regulatory and other approvals but was approved by Refco shareholders. Credit Suisse First Boston, Deutsche Bank and Bank of America will finance the deal should it go ahead.

Refco said it is the largest non-bank futures commission merchant in the world, clearing millions of trades daily at a centralised clearing facility. In addition, it provides 24-hour trade execution services on all major international exchanges, the company said.

Phillip Bennett, president and chief executive of Refco, said he did not expect any changes in customer or exchange relationships.