This proposed transaction values NYMEX at $1.35 billion post-investment. The investment, if completed, would serve as the next step in NYMEXâs continuing transformation, which began with its demutualization in 2000, to allow its members the opportunity to realize the equity value of their holdings. It is expected that the net proceeds from the investment would be distributed to NYMEX shareholders. General Atlantic would not participate in that distribution.
NYMEX Chairman Mitchell Steinhause said, âTodayâs announcement follows a thorough review by our board of directors to determine the best long-term strategic direction for the Exchange in a competitive and dynamic industry. Over the course of several months, we evaluated a number of bona fide investors, as well as other alternatives. We believe this transaction provides NYMEX with the right balance of continued autonomy, open outcry trading protection, and an attractive valuation.â
"Since its founding more than 130 years ago, NYMEX has built a valuable franchise with a number of very attractive growth opportunities," said Bill Ford, President of General Atlantic. "Led by its open outcry trading platform, NYMEX is the dominant liquidity center for the global commodity energy futures trading marketplace. We look forward to working closely with the NYMEX board and management team to capitalize on NYMEXâs many strengths and extend its leadership position." Mr. Ford will be joining the board of directors upon consummation of the transaction.
"General Atlantic has a proven record of building value in the exchange sector," Mr. Steinhause said. âIt is a world-class investment firm with valuable capital markets expertise, and we are pleased that they have recognized the unique value of our model and our potential for continued strong performance. With General Atlanticâs help, we will be able to preserve our rich heritage while growing and enhancing our business for the benefit of our shareholders, members, traders, customers and employees.â
As previously announced, NYMEXâs board of directors began a review of its strategic direction in early 2005. The board formed a special committee to lead the process and engaged J.P. Morgan Securities Inc. as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel to provide guidance.
NYMEX plans to hold an informational presentation for shareholders and members in New York City on Thursday, September 29, to introduce General Atlantic and to discuss the proposed investment and other recent NYMEX developments.
Consummation of the transaction with General Atlantic will require successful negotiation and execution of definitive documentation as well as the approval of Exchange shareholders and Commodity Futures Trading Commission (CFTC) approval. Therefore, there can be no assurance that the proposed investment by General Atlantic in NYMEX will be completed on the currently proposed terms or will ever be completed, or that the required corporate and CFTC approvals will be obtained.