Cboe Global Markets to acquire Canada's NEO Exchange parent Aequitas

Cboe Global Markets Inc. agreed to acquire Aequitas Innovations Inc., more commonly known as NEO, a financial technology organization comprising a fully registered Tier-1 Canadian securities exchange.

Aequitas Innovations is the parent of NEO Exchange, a Toronto-based Canadian stock exchange operator with business lines across listings, trading and market data. NEO Exchange has been fully operational since 2015.

The deal is expected to close in the first half of 2022.

Terms of the deal were not disclosed, but Cboe said the purchase price is not material from a financial perspective and expects it to be nominally accretive.

The deal will provide Cboe with NEO Exchange in addition to Canada-based MATCHNow, the alternative trading system that Cboe acquired in 2020. With both businesses, Cboe will be able to provide a comprehensive equities platform for the Canadian markets with a more than 16.5% combined market share expected at close, market data feeds, access services, listings and distribution services for non-listed securities, according to a press release.

NEO Exchange's sister company, NEO Connect, provides a distribution platform supporting mutual funds, private funds and private corporates.

"Adding NEO to the Cboe network better enables us to create a first-class equities offering in Canada, bolstering our global markets in North America, Europe and Asia Pacific, and bringing us one step closer to our vision of building one of the world's largest global derivatives and securities trading networks," Ed Tilly, chairman, president and CEO of Cboe, said in a statement.

Cboe plans to fund the transaction with cash on hand, supplemented by increased debt if needed.

Blake Cassels & Graydon LLP served as legal adviser to Cboe on the transaction and TD Securities Inc. was its financial adviser.