Jefferies Group, Inc. has announced that it has entered into a definitive agreement to acquire PrudentialBache’s Global Commodities Group from Prudential Financial, Inc. for a purchase price equal to tangible book value, or approximately $430m.
Through its Futures Commission Merchant, Prudential Bache Commodities LLC, Prudential Bache offers brokerage and clearing services in listed derivatives on all major futures and options exchanges around the world. Prudential Bache also offers over-the-counter trading in foreign exchange, base and precious metals, and energy and agricultural swap transactions.
The primary companies to be acquired include Prudential Bache Commodities LLC, Prudential Bache Securities LLC in the U.S., Bache Commodities Limited in the U.K. and Bache Commodities (Hong Kong) Ltd. in Hong Kong. The
acquired businesses will operate globally as Jefferies Bache after the acquisition is completed, which is expected in Jefferies’ third fiscal quarter, subject to regulatory approval. The business recorded 2010 revenues of approximately $220 million and is profitable. The primary assets of the business being acquired are cash, securities, receivables and trading inventory. Jefferies Bache will have over 400 employees in New York, Chicago, London, Hong Kong and Hamburg.
'The acquisition of the Bache platform provides Jefferies a unique opportunity to rapidly and cost effectively accelerate our growth in futures and expand our presence in commodities', said Richard Handler and Brian Friedman, CEO and Chairman of the Executive Committee of Jefferies, respectively. 'This acquisition fits squarely in our strategy for listed derivatives that included Patrice Blanc joining us late last year as President of the Jefferies Futures Division'.
'Founded in 1879, Bache ranks amongst its peers as one of the most recognizable and reputable firms in the futures industry', added Patrice Blanc, who will serve as Chairman and CEO of Jefferies Bache. 'Jefferies’ extensive and deep relationships in the global investment community will complement Bache's historic strength in serving end-users throughout the world’s commodity producing and consuming markets. As a client-focused firm, Jefferies will respond to our customer’s needs in futures and options, foreign exchange, base and precious metals and customized commodity structured products, and be recognized as a significant global leader in execution and clearing of listed derivatives'.
'We are all excited by the growth and opportunity that will be driven by the Jefferies Bache combination', said Alex Ladouceur, President of Prudential Bache Commodities, who will continue in that role with Jefferies Bache. 'We look forward to serving a broader global client base, as well as deepening our product offering'.