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General Atlantic-backed Getco to buy Knight Capital for $2bn

19 Dec 2012

Getco, an electronic trading company backed by global growth investor General Atlantic, will reportedly buy embattled market-maker Knight Capital for about $2bn.

The decision follows a sweetened bid from Getco that trumped a rival offer from Virtu Financial, which was reported to be backed by Silver Lake Partners and banks including Credit Suisse.

The acquisition will see Getco merge into Knight to create a new publicly traded company, according to Reuters, which cited unnamed sources familiar with the matter.

The two-thirds cash deal values Knight at $3.75 a share, the report said.

Knight was left almost bankrupt this summer following a trading glitch that was estimated to have cost the firm about $440m.

The broker in August appointed three new directors to its board including Blackstone MD Martin Brand and General Atlantic advisory director Matthew Nimetz as part of the terms of a $400m rescue deal from firms including Jefferies, Blackstone, Getco, Stephens, Stifel and TD Ameritrade.

The software that led to the issue was removed from the company’s systems and the mistaken trading positions that occurred due to the glitch were sold to Goldman Sachs to be unwound.

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