Knight Capital Completes $75M Libertas Buy

JERSEY CITY-Knight Capital Group Inc. finalized its acquisition of Greenwich, CT-based Libertas Holdings LLC. Knight paid $50 million in cash and $25 million in unregistered stock to seal the deal. The agreement also included a potential earn-out of up to $75 million of Knight stock based on Libertas’s performance over the next three years.

Knight revealed its intention to acquire Libertas, a boutique institutional fixed-income brokerage firm, in early May of this year. A company spokesperson for Knight tells GlobeSt.com that Knight was interested in Libertas because the acquisition would mean the addition of institutional fixed-income capabilities to Knight’s current offerings. This is, according to the spokesperson, an important step in building Knight’s pools of liquidity across asset classes. Knight currently provides trade execution services and investment research across a range of fixed income securities, including high-yield and high-grade corporate bonds, asset-backed and mortgage-backed securities and syndicated loans.

“Libertas is a fast-growing, fixed income boutique that provides buy-side clients with proprietary research and much needed liquidity in the trading process,” says Knight chairman and CEO Thomas Joyce, in a company release.

Libertas will operate as a wholly-owned operating subsidiary of Knight and has been renamed Knight Libertas. Gary Katcher, the CEO who founded Libertas in 2002, has been named senior managing director and head of global institutional fixed income. The Knight spokesperson says the company will now turn its attention to cross-selling equity and fixed income trade execution services to the combined institutional client bases of Knight and Libertas.

“Joining Knight presents a perfect fit and the next logical step for Libertas,” Katcher says in a company release. “Our shared client focus, combined with the deep resources of Knight Capital Group will allow us to grow all aspects of our fixed income business much faster than if we had opted to remain independent.”