Bats Global Markets has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). No pricing details were given in the filing, but the offering is valued up to $100 million, although this number is usually just a place holder. The company intends to list the common stock on the BATS Exchange (BZX) under the symbol BATS.
The underwriters for this offering are Morgan Stanley, Citigroup, Merrill Lynch, Credit Suisse, Goldman Sachs, JPMorgan, Jefferies, Barclays, Nomura and Sandler O’Neill.
This is a leading global operator of securities exchanges and other electronic markets enabled by world-class technology. It provides trade execution, market data, trade reporting, connectivity and risk management solutions to brokers, market makers, asset managers and other market participants, ultimately benefiting retail and institutional investors across multiple asset classes.
The principal objective is to improve markets by maximizing efficiency and mitigating trade execution risk for market participants. The asset class focus currently comprises listed cash equity securities in the United States and Europe, listed equity options in the United States and institutional spot FX globally, as well as exchange traded products (ETPs), including exchange traded funds (ETFs), in the United States and Europe.
Trade execution was 44.7% of revenues, less cost of revenues, and market data and connectivity, or non-transaction revenues, was 55.3% of revenues, less cost of revenues, for the nine months ended September 30, 2015.
This company is the second largest exchange operator in U.S.-listed cash equity securities trading by market share, the largest exchange operator of ETFs and other ETPs by market share, and the largest European exchange operator as measured by notional value traded.
In the filing, Bats described its finances as:
Our revenue consists primarily of transaction fees, regulatory fees, market data fees and port fees. On a consolidated basis, our revenues less cost of revenues were $285.8 million for the nine months ended September 30, 2015, which represents a 27.7% increase from the $223.8 million generated for the nine months ended September 30, 2014. Non-transaction revenues were 55.3% of revenues less cost of revenues for the nine months ended September 30, 2015. On a consolidated basis, we generated $307.5 million in revenues less cost of revenues for the year ended December 31, 2014. Adjusting for growth through acquisitions, our organic compound annual growth rate of revenues less cost of revenue for the last four years was 12.8%.
The company intends to use the net proceeds to pay down its amended 2014 loan and for general corporate purposes.
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