Lehman Exits Bats Global Markets Stake

Bats Global Markets Inc. gained two new owners after Lehman Brothers Holdings Inc.’s estate exited its investment in the 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, according to a statement from Bats and the investors. Lehman had been the second-largest Bats owner. Financial terms weren’t disclosed.

Founded in 2005 by high-frequency traders, Lenexa, Kansas-based 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 daily U.S. stock trading each day, according to data compiled by Bloomberg.

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

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.

Canceled IPO

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 has no plans for another IPO.

TA Associates’s other investments include RGM Advisors LLC, a quantitative trading firm. Spectrum Equity’s software, Internet and media investments include online food ordering company Seamless and theater owner AMC Entertainment Inc.

Rosenblatt Securities Inc. advised the private-equity firms on the transaction, according to the statement from Bats.

To contact the reporter on this story: Sam Mamudi in New York at smamudi@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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