7RIDGE Deal for Trading Technologies Completes Robust Auction Amid Industry Strategic Players

John Lothian

John Lothian

Executive Chairman and CEO

TT CEO Tim Geannopulos and President Farley Owens to Exit Firm After Closing; Geannopulos Stays as Board Member and Strategic Advisor to New CEO Keith Todd

Tim Geannopulos was given the job of CEO of Trading Technologies by TT’s majority owner, Harris Brumfield, with one big mandate: find a buyer through a big, robust, competitive and active auction process that discovers the right party to buy the firm and is aligned with the interests of the shareholders, employees and customers. Geannopulos accomplished that goal when the deal for the private equity firm 7RIDGE was announced Sunday as the buyer of TT with the support of SGX and Cboe Global Markets as investors in the fund managed by 7RIDGE.

The auction of TT generated interest from many potential strategic partners, Geannopulos said. What he noticed was that the strategic partners were interested in involving a private equity group as the general partner. There were several private equity groups interested, but one had a “dream team” of players that impressed him the most. 

“The group that I was really impressed with because of their leadership, domain expertise, their  experience, was 7RIDGE,” Geannopulos said. “You have a lot of ‘dream team’ type of people from this industry,” he said.

When Carsten Kengeter and Veronica Augustsson of 7RIDGE visited Geannopulos while on a family vacation and shared dinner, a bike ride and lunch with Geannopulos, he came away liking their vision for the firm. Adding in Keith Todd as the new CEO “was the cherry on the cake,” Geannopulos said. Geannopulos noted he has known Todd for 20 years, since he called him up in 2003 and told him TT was going to sue Todd’s then-employer FFastFill over its infringement of TT ladder technology patents. Geannopulos and Todd have remained friends since then.  

The 7RIDGE offer for TT checked all the boxes, including offering the best deal for shareholders. But it also kept TT independent, which was important to the employees. And 7RIDGE is going to put money into the company for strategic development or acquisitions, Geannopulos said. 

“As we all know, it is important to keep the “I” in ISV,” Geannopulos said about TT’s status as an independent software vendor.

Also, for customers it was important for TT not to be sold to a single broker or an unpopular ISV, or even another private equity firm that might flip the firm in three to five years, Geannopulos said. 7RIDGE has a perpetuity structure that leaves its future open-ended, supported by strategic partners SGX and Cboe, who have a long-term outlook. 

Additionally, this is a good deal for the industry, Geannopulos said, noting there has been too much consolidation in the derivatives and capital markets industries.

“When you have too much consolidation, you lose diversity and competition,” Geannopulos said. “The beauty is TT is going to stay right in the mix and be more powerful and driven as ever. This is a happy ending for all of us at TT.”

Geannopolus put 7RIDGE and SGX and Cboe together to create the structure favored by the investors. “The three firms worked well together,” Geannopulos said. He noted, “They have a great structure.”

“We put the three together and it was true love after that,” Geannopulos said.

Keith Todd has known Carsten Kengeter for the last four years and Veronica Augustsson longer. When he was approached by them to build the “world’s premier trading platform” by bidding for Trading Technologies, he said his answer was an immediate yes.

Todd is giving up the role of CEO of KRM22, a firm he created with Stephen Casner 3½ years ago. Casner becomes the new KRM22 CEO and Todd will be the executive chairman. 

7RIDGE is buying a 25% interest in KRM22 as part of the deal and KRM22 and TT are working on a distribution deal that will bundle the KRM22 risk offerings into TT’s platform, Todd said.

With TT’s platform facilitating the trading of nearly 2 billion contracts per year, larger than some exchanges, and having the most modern technology stack of any ISV, Todd and Geannopulos said the firm is poised for growth. 

Todd said the first step is to consolidate its position in derivatives and then move into other asset classes. Already, TT facilitates some trading in crypto venues, but foreign currency trading and a fuller breadth of order management system functionality are part of the growth plan.

However, the first priority  is to close the deal, Todd said.

Geannopulos will stay on as a board member and strategic advisor to Todd, he said. Geannopulos and TT President Farley Owens are the only TT employees leaving the firm. Owens is expected to leave after the deal closes to “explore opportunities outside TT,” Geanopulos said.

Harris Brumfield will be cheering TT on from the sidelines, exiting the firm he bought after using its software while he was a trader  in the early days of bund trading on Eurex. 

Geannopulos lauded Brumfield for his risk taking. 

“One of the things I am really proud of at TT is Harris’ risk-taking DNA and you saw that when he came out with his own invention, the ladder, and tried to convert and did convert all the market grids into ladders,” Geannopulos said. “You saw it again when he continued to fund TT when it was trying to go to this new platform. We have a head start from a tech stack standpoint.”

“He did again when he put myself and Farley in charge to find the company’s next great owner,” he said. “It is not just a fitting ending for people like myself, and Keith and TT employees, and 7RIDGE, it is really a nice ending for one of the most patient, generous angel investors in the industry and that is Harris.”

“Harris is a permanent piece of this industry,” Todd said. “Harris will always be welcome at Trading Technologies.”

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