Refco sells stake to Thomas H. Lee

Discussion in 'Retail Brokers' started by arl, Jun 8, 2004.

  1. arl

    arl

    Refco sells stake to Thomas H. Lee
    Deal values futures traders at $2.25B

    By Steve Gelsi, CBS.MarketWatch.com


    NEW YORK (CBS.MW) -- Refco on Tuesday confirmed plans by Thomas A. Lee Partners to take a majority stake in a deal that values the privately held financial-services firm at $2.25 billion.

    Terms of the deal weren't disclosed, but Thomas H. Lee, a Boston-based private equity firm, will essentially take the helm of the 3,000-employee futures trading and derivatives clearance firm with about $20 billion in assets.

    Press reports regarding a deal involving one of the world's largest retail futures brokerage firms surfaced late last month. Refco also specializes in the fixed-income and foreign-exchange markets.

    The investment would enable Refco to recapitalize its ownership, the company said.

    As part of the agreement with Thomas H. Lee, Refco's management team will retain a "significant" ownership stake in the company.

    The move clears the way for a potential initial public offering of Refco. Thomas H. Lee has been behind two recent IPOs: Endurance Specialty (ENH: news, chart, profile) and Axis Capital Holdings (AXS: news, chart, profile).

    Officials from Refco didn't immediately return a phone call.

    "Refco is an ideal fit with our strategy of investing in growth companies with leading market positions and strong management teams," said Scott Schoen, senior managing director of Thomas H. Lee Partners, in a statement. "The investment also complements our long-term commitment to the financial-services segment."

    Thomas H. Lee said Refco has "dramatically increased revenues, EBITDA and market share through strong internal growth and targeted acquisitions that have expanded the company's market access, customer base and product offerings."

    Bank of America (BAC: news, chart, profile), CS First Boston (CSR: news, chart, profile) and Deutsche Bank (DB: news, chart, profile) are financing the transaction.
     
  2. Oldtimer

    Oldtimer

    ...and this benefits Refco's trading clientele how????
     
  3. just a few years ago refco didnt have jack squat going
     
  4. Xenia

    Xenia

    NEW YORK, JUNE 8, 2004 - REFCO Group Ltd., LLC, a world leader in providing risk management and investment services, announced today that it has signed a definitive agreement with Thomas H. Lee Partners enabling the well-regarded private equity firm to acquire a major ownership stake in the company. Financial terms of the deal were not disclosed; however, the transaction, which is subject to regulatory and other approvals, values the company at approximately $2.25 billion.

    REFCO is one of the largest global execution and clearing firms for derivatives as well as a fast-growing provider of prime brokerage services in the fixed income and foreign exchange (FX) markets. Across its products and markets the company offers its customers unconflicted access to markets, high service levels and leading technology. REFCO has capitalized on the growth in exchange traded products by building a leading global derivatives brokerage market share through strategic acquisitions, such as Lind-Waldock and MacFutures, as well as organic growth. REFCO's derivatives platform offers its diversified customer base unparalled access to the full range of derivative products traded on any exchange in the world.

    Phillip R. Bennett, President and Chief Executive Officer, said, "We chose Thomas H. Lee Partners as a partner because of its proven ability to work closely with management to implement growth strategies, its significant financial resources and its extensive experience in financial services. This transaction provides us with a leading financial partner that supports our vision for the company and our strategy of building on a strong foundation through internal growth and opportunistic acquisitions."

    Bennett added, "We don't anticipate any changes in our marketing strategy, our management structure, our customer relationships, or our relationships with major exchanges in the 14 countries in which we operate. Going forward, our businesses will continue to be well capitalized and focused on meeting our customers' needs."

    REFCO said the new investment would enable the firm to recapitalize its ownership structure while securing REFCO's long-term strategic direction under Bennett's leadership. As part of the agreement with Thomas H. Lee Partners, REFCO's management team will retain a significant ownership stake in the company.

    "We are a recognized leader in an industry with more than 30 percent per annum growth over the last several years," Bennett said. "Our growth has largely been fueled by a commitment to technological innovation that has expanded our state-of-the-art electronic trading platforms and global foot print. We will continue to provide outstanding products and services to our sophisticated retail and institutional investors around the world."

    Scott A. Schoen, Senior Managing Director of Thomas H. Lee Partners, said, "REFCO's leadership in the growing derivatives and specialty cash markets, along with its diversification across exchanges, clients and geography, provides a strong platform for the future. REFCO is an ideal fit with our strategy of investing in growth companies with leading market positions and strong management teams. The investment also complements our long-term commitment to the financial services segment, including investments in companies like Tucker Anthony Sutro, Endurance Specialty Insurance, AXIS Capital Holdings and Homeside Lending."

    Thomas H. Lee, Chairman and CEO of Thomas H. Lee Partners, added, "This investment is a partnership with Phillip Bennett and his senior management team. We are very excited to have Phil as a significant owner alongside THL in this transaction. In the last five years, this management team has dramatically increased revenues, EBITDA and market share through strong internal growth and targeted acquisitions that have expanded the company's market access, customer base and product offerings."

    Financing for the transaction will be provided by Bank of America, Credit Suisse First Boston and Deutsche Bank. Credit Suisse First Boston was the sell-side Mergers & Acquisitions advisor for REFCO and Sandler O'Neill & Partners was the lead buy-side M&A advisor for Thomas H. Lee Partners, with Bank of America and Deutsche Bank as co-advisors. Weil, Gotshal & Manges LLP provided legal advice for Thomas H. Lee Partners. Mayer, Brown, Rowe & Maw LLP provided legal advice for REFCO.

    About Thomas H. Lee Partners. Thomas H. Lee Partners, L.P. is a Boston-based private equity firm focused on identifying and acquiring substantial ownership positions in growth companies. Founded in 1974, Thomas H. Lee Partners currently manages approximately $14 billion of capital, including its most recent fund, the $6.1 billion Thomas H. Lee Equity Fund V. Notable transactions sponsored by the firm include: American Media, AXIS Capital Holdings Limited, Cott Corporation, Endurance Specialty Insurance, General Nutrition Companies, Homeside Lending, Houghton Mifflin, Michael Foods, National Waterworks, Simmons Company, Snapple Beverage, TransWestern Publishing, Tucker Anthony Sutro and Warner Music Group.

    About REFCO Group Ltd., LLC. REFCO Group Ltd., LLC (www.refco.com) is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. REFCO Group's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London, Frankfurt, Paris and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives.

    www.refco.com/nr/nr.news.asp
     
  5. and now they are selling..hmm
     
  6. I don't know a lot of details, but the private owner of Refco is very old, if he is still alive. Could be the reason for the sale.
     
  7. watch-out. I got burned by this guy back in the 80's when he partnered with Merrill Lynch in some mezzanine finance deals. He really ripped people off with the Snapple IPO.
    I am amazed he is still in business.
    Then again, Wallstreet got away with murder back then.
    Today, he would be locked-up.
     
  8. Xenia

    Xenia

    Refco Inc. Files Registration Statement for Initial Public Offering of Its Common Stock

    NEW YORK, APRIL 11, 2005 - Refco Inc. (the "Company") today announced it has filed a registration statement with the Securities and Exchange Commission for a proposed initial public offering of its common stock. The number of shares to be offered and the price range for the offering have not yet been determined. A portion of the shares will be issued by the Company and a portion will be sold by certain shareholders of the Company. Proceeds from the shares issued by the Company will be used to repay outstanding indebtedness and for general corporate purposes.

    Credit Suisse First Boston LLC, Goldman, Sachs & Co. and Banc of America Securities LLC will act as joint book-running managers for the proposed offering, with Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Sandler O'Neill & Partners, L.P. and HSBC Securities (USA) Inc. as co-managers.

    A preliminary prospectus, when it becomes available, may be obtained from Credit Suisse First Boston LLC, Prospectus Department, Eleven Madison Avenue, New York, NY 10010 (212-325-2580), Goldman, Sachs & Co., Prospectus Department, 85 Broad Street, New York, NY 10004 (212-902-1171) and Banc of America Securities LLC, Prospectus Department, 100 West 33rd Street, 3rd Floor, New York, NY 10001 (646-733-4166).

    A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
     
  9. I would be wary. More than likely, the company will borrow money to pay a dividend to the private equity folks along with a substantial chunk of the IPO proceeds.
     
  10. Xenia

    Xenia

    REFCO INC. Prices Its Initial Public Offering At $22.00 Per Share

    NEW YORK, AUGUST 11, 2005

    Refco Inc. (NYSE: RFX), a diversified financial services company, today announced that it has priced its initial public offering of 26,500,000 shares of common stock at $22.00 per share. The company is selling 12,500,000 shares, and 14,000,000 shares will be sold by existing stockholders. Refco has granted the underwriters an option to purchase from Refco within the next thirty days up to an additional 3,975,000 shares at the initial public offering price to cover over-allotments, if any.

    Refco’s common stock is scheduled to commence trading on August 11, 2005 on the New York Stock Exchange under the symbol RFX. Proceeds from the shares sold by Refco will be used to redeem outstanding indebtedness and for general corporate purposes. Any proceeds from the exercise of the underwriters’ over-allotment option will be paid as a dividend to Refco’s stockholders of record prior to the offering.

    Credit Suisse First Boston LLC, Goldman, Sachs & Co. and Banc of America Securities LLC are the joint book-running managers for the IPO. Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Sandler O'Neill & Partners, L.P. and HSBC Securities (USA) Inc. are the co-managers.

    A copy of the final prospectus relating to the offering may be obtained from: Credit Suisse First Boston LLC, Prospectus Department, Eleven Madison Avenue, New York, NY 10010 (212-325-2580); Goldman, Sachs & Co., Prospectus Department, 85 Broad Street, New York, NY 10004 (212-902-1171); and Banc of America Securities LLC, Prospectus Department, 100 West 33rd Street, 3rd Floor, New York, NY 10001 (646-733-4166).

    A registration statement relating to these securities has been declared effective by the Securities and Exchange Commission. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

    Refco is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London, Paris and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives.

    REFCO INC
    One World Financial Center
    200 Liberty Street – Tower A
    New York, NY 10281
    212-693-7000
    www.refco.com
     
    #10     Aug 12, 2005