Two equity firms buy stakes in Bats Global Markets

Bats Global Markets
Bats Global Markets

Bats Global Markets Inc. gained two owners after Lehman Brothers Holdings Inc.’s estate exited its investment in the Lenexa-based operator of U.S. and European exchanges.

Private equity firms Spectrum Equity Investors LP and TA Associates Management LP bought all of Lehman’s stake, Bats said in a statement.

Lehman had been the second-largest Bats owner. The financial terms of the purchases weren’t disclosed.

Founded in 2005 by high-frequency traders, Bats operates two stock exchanges and an options market in the U.S. as well as Bats Chi-X Europe. After becoming an exchange in 2008, Bats now accounts for almost 10 percent of U.S. stock trading, making it the third-largest exchange here, behind the New York Stock Exchange and Nasdaq.

“Bats has established itself as an innovative firm committed to enhancing market efficiency and leveling the playing field for all investors,” said Chris Mitchell, managing director at Spectrum Equity, who will take a seat on the Bats board.

Lehman, whose 2008 bankruptcy intensified the global financial crisis, had planned to sell more Bats shares than any other owner in the exchange operator’s aborted 2012 initial public offering. Documents from the IPO showed Lehman wanted to cut its voting power to 7.7 percent from 12.3 percent. The latter figure made it the second-biggest Bats owner.

The same regulatory filings showed Getco LLC, which this year merged with Knight Capital Group Inc. to form KCG Holdings Inc., was the largest owner, with a 15.4 percent voting interest. Other Bats owners include Morgan Stanley, Credit Suisse Group AG, Nomura Holdings Inc., Citigroup Inc. and Bats co-founder Dave Cummings, according to last year’s IPO documents.

Bats canceled its IPO in March 2012. The company’s owners received $400 million in dividends during the second half of last year, according to Randy Williams, a Bats spokesman. Williams said Bats had no plans for another IPO.

Other investments by TA Associates include RGM Advisors LLC, a quantitative trading firm.