TOKYO: Japan's largest securities firm Nomura Holdings Inc. is acquiring New York-based electronic brokerage firm Instinet Inc.
The buyout will help Nomura to have a better access to hedge fund clients, who manage almost half of the trading on the New York and London Stock exchanges.
Nomura did not reveal the financial terms of the deal with buyout firm Menlo Park, California-based private equity firm Silver Lake Partners, which is majority owner of Instinet, after buying it from the Nasdaq Stock Market in December 2005 paying $208 million. It, however, said it will pay cash for a 100% holding in the firm.
In the second quarter, Instinet had handled a daily average of 189 million shares traded in the U.S., which is more than double a year earlier. It also handled average daily trades in Europe worth $1.1 billion and in Asia-Pacific region worth $586 million.
Set up in 1969, Instinet has 1,500 institutional clients. It has 605 employees and offices in 13 major world cities.
Nomura derives around 30 per cent of its revenue from Japan's equity market. It has been under pressure to identify alternative sources of revenue.
A spokesperson for the company said with Instinet, it will be able to provide hedge funds and other institutional investors with value-added trading technologies and execution services.
Instinet chief executive officer Edward J. Nicoll said in a statement Nomura is one of the world's premier financial services firms and Instinet is excited to join its family.
Analysts estimate the selling price of Instinet at around $1 billion.
