ITG Sells Energy Research Business to Warburg Pincus

Nov 5 2015 | 9:43pm ET

Investment Technology Group has announced the sale of its energy research group to Warburg Pincus for $120.5 million in an all-cash transaction.

Based in Calgary, Canada, ITG’s energy group provides research on companies operating in North American and international energy plays. ITG will continue to provide the energy research to its institutional clients, while Warburg Pincus plans to relaunch the business under a new name and boost its products.

The new name of the unit has not yet been released. 

ITG will realize an after-tax gain of $90 - $95 million on the deal, according to the company, and is considering a number of alternative uses for the proceeds, including potential strategic steps and stock repurchases.

The deal is expected to close by the end of the year.

ITG has been under pressure lately. In August, it paid $20.3 million to settle charges regarding a secret trading desk that allegedly misused confidential customer trading information. The company’s former CEO, Robert Gasser, left in August after an investigation determined some details of the alleged dark pool infractions were not disclosed to the board.

Operationally, the company’s net profit fell from $11.4 million to $2.71 million in the third quarter, on lower sales of $120.4 million.

Founded in 1966, New York-based Warburg Pincus is private equity firm with more than $35 billion in assets under management in an active portfolio of more than 120 investments. Since inception, Warburg Pincus has raised 14 private equity funds, which have invested more than $50 billion in over 720 companies in more than 35 countries. 

ITG is an independent execution broker and research provider that partners with global portfolio managers and traders. The company is well-known for its POSIT crossing network, which was launched in 1987, and has since developed a broad suite of products that cater to hedge funds and other alternative investment managers.

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