Customers of Toffey’s online fixed-income exchange were crying out for news, research and analytics to complement TradeWeb’s trade execution capabilities. CEO and co-founder Toffey wanted to help them, but how? Sharon Rowlands, president and COO of Thomson Financial, gave him the answer.
Last month Thomson, which supplies financial data and technology to Wall Street, bought TradeWeb from its eight investment bank owners for a cool $385 million -- plus an earn-out of $150 million if TradeWeb meets revenue targets over the next three years. The deal will help Thomson vie with Bloomberg and Reuters while giving TradeWeb’s customers access to Thomson’s pricing and analytical tools.
“By leveraging Thomson’s content with our functionality, we’ll be able to deliver more market data and content much sooner than we could if we were on our own,” says Toffey, 42, who will direct all of Thomson’s fixed-income strategies and businesses as president of global markets.
Since founding TradeWeb in 1997, Toffey, a former bond-trading chief at Credit Suisse First Boston, has aggressively moved beyond U.S. Treasuries into mortgage-backed and European government debt as the fixed-income business has migrated online. Boston-based research firm Celent Communications calculates that nearly 30 percent of bond trades were done electronically last year.
In the first quarter of 2004, TradeWeb executed a record $5.4 trillion in trades, a 42 percent increase over the same period last year (and a 15 percent rise over the fourth quarter of 2003). Owning that flow will infuse Thomson’s market-data offerings with powerful new information about hard-to-price securities. Says Rowlands, “We really want to unlock the value in the content that is created almost as a side benefit of the trade execution process.”
