Colt to target financial sector with majority stake in MarketPrizm

European network services company Colt Group S.A. expects to improve its offerings to the financial industry after agreeing to acquire a majority stake in MarketPrizm, a provider of low-latency market data and trading infrastructure services, from Instinet Inc. Colt says it will not have to pay anything up front because it has committed to fund MarketPrizm through its next phase of growth.

Instinet Inc. – previously MarketPrizm’s sole shareholder via its Chi-X Global Inc. subsidiary – will remain a minority shareholder.

Colt will add MarketPrizm’s expertise in market data and trading infrastructure services to Colt’s existing low-latency network resources and proximity hosting services. The combination will add muscle to Colt’s network services offerings to financial sector customers as well as generally within the managed services area. Meanwhile, Colt will help MarketPrizm expand in EMEA and Asia Pacific.

MarketPrizm has an existing base of financial sector customers, market data feed technology, and a low-latency network that connects to the important European trading venues.

Colt expects there to be a net impact on reported EBITDA of up to €10.0m in 2011 reflecting both the costs of the transaction and funding the aforementioned growth phase. The business is not expected to have a material capital expenditure requirement.

As a new subsidiary of Colt, MarketPrizm will be led by Tanuja Randery. Randery most recently led Colt’s Global Business Division. John Lowrey, current CEO of MarketPrizm, will become a member of the MarketPrizm board.

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