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Penson Worldwide, Inc. (NASDAQ: PNSN) today announced that it has agreed to sell certain assets and liabilities of the futures division of its U.S. broker-dealer subsidiary, Penson Financial Services, Inc. (PFSI), to Knight Capital Group, Inc. (NYSE Euronext: KCG). The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to be completed in the second quarter of 2012. PFSI’s futures division services more than 60 introducing brokers, high-frequency traders, hedgers, non-clearing FCMs, professional traders and exchange members.
As consideration for the transfer of certain assets and liabilities of the futures division, Penson will receive $5 million at closing, a portion of which is subject to the transfer of certain exchange seats or memberships. In addition, Penson is entitled to receive earn-out payments over the next three years based on the performance of the futures division. Penson management currently estimates that the total amount of consideration to be received will result in a small gain on the sale.
Customer futures positions and segregated funds and collateral, and foreign exchange positions and margin will be transferred to Knight. Access to positions and accounts by customers will not change and the transfer of the business will not require any technology conversions. Current management of Penson’s futures division will remain in place and Penson will continue to service its introducing brokers and customers through a transition services agreement with Knight. The parties expect that the majority of futures division employees will move to Knight. Additional details will be provided in subsequent Penson filings with the Securities and Exchange Commission.
“Knight provides accounts with a stable, well-capitalized, independent platform and it will be ‘business as usual’ for futures customers,” said Philip A. Pendergraft, CEO of Penson Worldwide. “This transaction represents an ideal solution for our futures introducing brokers, customers, and related counterparties, as well as for our other stakeholders. As previously announced, we continue to work on other strategic transactions in both the US and Canadian markets.”