NYSE Broadens Asian Reach by Adding Metabit to its Bench
NYSE Euronext (NYSE:NYX) recently acquired Metabit, a provider of market access products throughout Japan and Asia, that will complement the market access portfolio of NYSE. [1] The acquisition of Metabit serves two strategic purposes for NYSE Euronext: it expands NYSE Euronext’s geographical footprint and it helps in diversification of the company’s revenue sources. NYSE Euronext is the operator of the world’s largest stock exchange and competes with Nasdaq OMX (NASDAQ:NDAQ), CME Group (NASDAQ:CME) and IntercontinentalExchange (NYSE:ICE). About 70% of NYSE Euronext’s revenues are trading-related which are subject to volatility in the equity markets and thus are quite volatile themselves.
We have a price estimate of $34 on NYSE Euronext’s stock which is about 35% above the current market price.
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A Closer Look at Metabit
Based in Japan, Metabit has a strong presence in Asia with a trading community of more than 140 trading firms. It provides products designed for low-latency trading solutions and exchange connectivity to markets in Asia connecting buy-side order flow with sell side exchange participants. [2] The market access solutions are particularly designed to meet the requirements of the Asian markets and hence offer specialized benefits to its clients.
How does it Benefit NYSE Euronext?
NYSE Euronext acquired NYFIX, a leading provider of innovative solutions that optimize trading efficiency, which boosted the company’s technology services revenues from $147 million in 2008 to $318 million in 2010. There is a strong demand for market access services and the acquisition of Metabit will help NYSE to capitalize on that demand. Additionally it will also enhance NYSE’s operational and competitive efficiency against its peers.
See our full analysis of NYSE Euronext
Notes:- NYSE Euronext Completes Acquisition of Metabit, Press Release, NYSE Euronext, September 1, 2011 [↩]
- NYSE Euronext Accelerates Growth in Asia with Strategic Acquisition of Metabit, a Leading Provider of Market Access Products, NYSE News Releases, August 2011 [↩]