Transactions


$105 million Deal Value

has acquired

has acquired

Financial advisor to ITG

September 2002

Freeman & Co. Acted as Financial Advisor to Investment Technology Group, Inc.
Date
September 2002
Industry
Broker-Dealer, Financial Technology
Transaction
Buy-Side M&A
Deal Value
$105,000,000

ITG completes acquisition of Hoenig

September 3, 2002 (New York, NY) – Investment Technology Group, Inc. (“ITG”) (NYSE: ITG), a leading provider of technology based equity trading services, today announced that it has completed the acquisition of Hoenig Group Inc. (“Hoenig”), a leading provider of trade execution and research services to alternative investment funds.

Under the terms of the merger agreement dated February 28, 2002 and amended on July 2, 2002, ITG acquired Hoenig for $105 million with Hoenig shareholders receiving $11.35 per share and a contingent payment right entitling them to a pro-rata share of the amount, if any, recovered (after taxes and expenses) on certain insurance and other claims related to the previously announced trading loss and unauthorized trading activity at Hoenig's United Kingdom subsidiary. Approximately $2.4 million, or $0.23 per share, was placed in escrow to fund the continued pursuit of these claims on behalf of Hoenig shareholders and option holders, with any unexpended amounts to be paid pro-rata to holders of contingent payment rights, upon termination of the escrow.

“This acquisition accelerates our growth strategy in the hedge fund market with an established and expanding high-quality client base,” said Robert J. Russel, ITG's Chief Executive Officer. “The combination of Hoenig's hedge fund expertise and ITG's proven trading technology should position us to achieve attractive growth rates.”

Hoenig will be a wholly owned subsidiary of ITG with its U.S. operations reporting to newly named CEO Steven Sorice. Mr. Sorice joined ITG in 1994 and has been a Managing Director and Co-Head of Sales and Trading since 1999. “Combining ITG's pre- and post-trade analytical tools and advanced direct access capabilities with Hoenig's highly respected expertise in hedge fund customer service and trade execution will provide the institutional marketplace with a powerful suite of products that are second to none in our industry. Our collective efforts will enable our customers to enhance execution performance in these challenging market conditions,” stated Mr. Sorice.

Hoenig's operations in London will be integrated into ITG's European business under the supervision of Alasdair Haynes, ITG Europe's Chief Executive Officer. Hoenig's Hong Kong subsidiary will become part of ITG's Asian operations, under the supervision of Greg Robinson, ITG Australia's Chief Executive Officer.