Investment firm J.C. Flowers agreed to buy 30% of LMAX Group for $300 million in cash.
The stake values LMAX, which operates exchanges for forex and crypto trades, at $1 billion, LMAX said in a statement on its website.
The move will allow J.C. Flowers to accelerate the growth of its foreign-exchange and crypto-asset businesses.
London-based LMAX operates five exchanges globally. In 2018, it started LMAX Digital, an exchange for spot crypto that has more than 500 institutional clients.
Cryptocurrency accounted for 11% of LMAX Group volumes in the firm’s first half results, CEO David Mercer said in an interview, and just over 30% of revenues.
The fact that a finance-focused private equity player of the calibre of J.C. Flowers is taking an interest in crypto could generate a degree of frisson in the digital asset space. But Mercer played this down.
“I wouldn’t classify J.C. Flowers as crypto evangelists; they are far from it,” Mercer told CoinDesk. “They are specialist financial services investors, and they’ve invested $16 billion over 22 years only in financial services. They see the future of capital markets the way we see it.”
LMAX Digital is the largest institutional cryptocurrency exchange by volume.
The exchange, which prides itself on having zero down time even in periods of very heavy use, registered a record daily volume of $6.6 billion back in May when the price of bitcoin dropped precipitously.
Jefferies acted a sole financial adviser to J.C. Flowers
Ian Allison contributed reporting.
UPDATE (JULY 15, 12:36 UTC): Adds background on LMAX.
UPDATE (JULY 15, 14:31 UTC): Adds comments from LMAX CEO David Mercer.
UPDATE (JULY 15, 15:16 UTC): Adds J.C. Flowers’ adviser.