8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 13, 2019 (August 12, 2019)

MarketAxess Holdings Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-34091	52-2230784
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

55 Hudson Yards

New York, New York 10001

(Address of principal executive offices, including zip code)

(212) 813-6000

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.003 per share	MKTX	NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 1.01. Entry into a Material Definitive Agreement

On August 12, 2019, MarketAxess Holdings Inc. (the “Company”) entered into a Unit Purchase Agreement (the “Agreement”) with LiquidityEdge LLC (“LiquidityEdge”), the holders of all of the outstanding equity interests in LiquidityEdge (each a “Seller,” and collectively the “Sellers”), the representative of the Sellers identified therein (the “Sellers’ Representative”) and, for certain limited purposes, one of LiquidityEdge’s founders, pursuant to which, upon the terms and subject to the conditions set forth therein, the Company will acquire from the Sellers all of the outstanding equity interests of LiquidityEdge (the “Transaction”).

The aggregate consideration payable by the Company under the Agreement will be an amount in cash equal to $100 million, subject to customary adjustments for cash, debt, transaction expenses and working capital, and a number of shares of the Company’s common stock having a value (calculated based on the average of the volume-weighted average of the trading price of the Company’s common stock on the NASDAQ Global Select Market during the thirty-day period ending on the fifth (5th) trading day prior to the closing of the Transaction (the “Closing”)) equal to $50 million. Under the Agreement, the Sellers are prohibited from transferring any of the Company common stock received in the Transaction for a period of six months following the Closing, and a portion of the stock consideration will be placed into escrow to secure the Sellers’ indemnification obligations under the Agreement (as described below).

Each party to the Agreement has made customary representations and warranties. The Agreement also contains customary pre-closing covenants, including that LiquidityEdge operate its business in the ordinary course consistent with past practice and refrain from taking certain actions without the Company’s consent. The parties have each agreed to use their respective commercially reasonable efforts to consummate the Transaction, including to obtain required regulatory approvals and certain consents.

Pursuant to the terms of the Agreement, the Sellers and the Company have each agreed to customary indemnification obligations with respect to breaches of their respective and, in the case of the Sellers, LiquidityEdge’s representations and warranties and failures to perform obligations under the Agreement (and, in the case of Sellers, for liabilities related to pre-Closing Taxes and certain employment related liabilities during the pre-Closing period), subject to certain limitations and deductibles.

The Agreement also contains covenants by the Sellers and the Company not to participate in discussions or negotiations regarding (or solicit or encourage any proposals for) an alternative transaction to the Transaction, and to notify the Company promptly following receipt of any alternative transaction proposal.

LiquidityEdge’s managing member, one of its founders and its chief executive officer have each agreed, for a period of three (3) years following the Closing (in the case of the managing member and founder), and for a period of two (2) years following the Closing (in the case of the chief executive officer), to customary non-solicitation covenants which prohibit the solicitation or hiring of certain employees of (or other individuals employed on behalf of) the Company or its subsidiary following Closing. During the same period, the managing member, founder and chief executive officer have also agreed not to own, hold, work for or otherwise control, operate, manage or engage in any Restricted Business (as defined in the Agreement).

The Closing is subject to the satisfaction or waiver of certain conditions set forth in the Agreement, including, among others, conditions related to the receipt of required antitrust and regulatory approvals (including under the HSR Act and from the U.K. Financial Conduct Authority and FINRA), the receipt of certain third-party contractual consents and termination of or entry into certain other contractual arrangements, the absence of any law or governmental order prohibiting the consummation of the Transaction, the accuracy of the parties respective representations and warranties, and the performance by the parties of their respective obligations under the Agreement.

Either the Company or the Sellers’ Representative may terminate the Agreement in certain circumstances, including in the event the Transaction has not been completed by March 12, 2020.

The Company intends to issue the Company common stock described herein in reliance upon the exemptions from registration afforded by Section 4(2) and Rule 506 promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

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The foregoing description of the Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Agreement.

Item 7.01 Regulation FD Disclosure.

On August 13, 2019, the Company issued a press release announcing the entry into the Agreement. A copy of the press release is attached hereto as Exhibit 99.1.

The information included in Item 7.01 of this Current Report on Form 8-K (including Exhibit 99.1 attached hereto) is furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act. In addition, the information included in this Current Report on Form 8-K (including Exhibit 99.1 attached hereto) that is furnished pursuant to Item 7.01 shall not be incorporated by reference into any registration statement or other document filed by the Company under the Securities Act or Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference into such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description
	99.1	Press Release, dated August 13, 2019.
	104	Cover Page Interactive File (the cover page tags are embedded within the Inline XBRL document).

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

MARKETAXESS HOLDINGS INC.
By:	/s/ Scott Pintoff
Name:	Scott Pintoff
Title:	General Counsel and Corporate Secretary

Date: August 13, 2019

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EX-99.1

Exhibit 99.1

MARKETAXESS TO ACQUIRE U.S. TREASURIES TRADING OPERATOR LIQUIDITYEDGE

NEW YORK, August 13, 2019 – MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, has entered into an agreement to acquire LiquidityEdge, a leading provider of an electronic U.S. Treasuries marketplace. The acquisition is valued at $150 million, including $100 million in cash and $50 million in MKTX stock, subject to customary purchase price adjustments.

Established in 2015, LiquidityEdge offers a bespoke trading ecosystem to connect a community of dealers, market-makers and institutional investors to trade in the $500 billion average-daily-volume U.S. Treasury market. LiquidityEdge’s innovative custom liquidity pools, as well as direct dealer streaming capabilities, for on- and off-the-run U.S. Treasuries has been quickly adopted by a diverse client base. In conjunction with MarketAxess’ global trading network of over 1,600 institutional participants, this acquisition creates a compelling combination for global fixed income market participants.

Chris Concannon, President and Chief Operating Officer of MarketAxess, commented, “Through the acquisition of LiquidityEdge, we are bringing rates trading capabilities to MarketAxess to complement our leading position of electronic trading in the global credit markets. This will not only enhance the trading experience for our dealer and institutional investor clients, but also offer a truly innovative solution for dealers to stream U.S. Treasury quotes to a tailored audience.”

Nichola Hunter, Chief Executive Officer of LiquidityEdge, added, “Across a few short years, LiquidityEdge has grown to become one of the leading marketplaces to trade U.S. Treasuries. Offering an alternative to incumbent trading protocols, LiquidityEdge continues to record daily highs in excess of $25 billion. That tremendous growth is made possible by our cutting-edge approach to liquidity management and superior technology solutions, something also shared by MarketAxess. MarketAxess has been a true pioneer in driving the evolution of the fixed income markets, and we’re thrilled that LiquidityEdge will add to that story.”

MarketAxess also announces the expansion of hedging capabilities to include Treasury hedging for MarketAxess’ credit products, utilizing LiquidityEdge’s technology infrastructure and robust liquidity network. Currently in development and targeted to launch the initial phase in the fourth quarter of 2019, this new functionality will enhance a client’s ability to simultaneously hedge a credit spread transaction within the same workflow, maximizing efficiency and reducing rate movement risk. The partnership with LiquidityEdge will add Treasury net hedging capabilities for aggregated sets of corporate bond trades.

The transaction is expected to close in the fourth quarter of 2019, subject to the satisfaction of customary closing conditions, including the receipt of required regulatory approvals.

Rick McVey, Chairman and Chief Executive Officer, Chris Concannon, President and Chief Operating Officer and Tony DeLise, Chief Financial Officer, will host a conference call today at 4:30pm EST with investor analysts to discuss the acquisition. To access the conference call, please dial 855-425-4206 (U.S.) or 484-756-4249 (international). The Company will also host a live audio Webcast of the conference call on the Investor Relations section of the Company’s website at http://investor.marketaxess.com. A replay of the call will be made available by dialing 855-859-2056 (U.S.) or 404-537-3406 (international) for one week after the announcement. The passcode for replay callers is 9197269. The Webcast will also be archived on http://investor.marketaxess.com for 90 days following the announcement.

# # #

About MarketAxess

MarketAxess operates a leading, institutional electronic trading platform delivering expanded liquidity opportunities, improved execution quality and significant cost savings across global fixed-income markets. A record $1.7 trillion of U.S. investment-grade bonds, U.S. high yield bonds, emerging market debt, Eurobonds and other fixed income securities traded through MarketAxess’ patented trading technology in 2018. The global community of 1,600 firms trading on MarketAxess today include the world’s leading asset managers and institutional broker-dealers. MarketAxess’ award-winning Open Trading^™ marketplace is regarded as the preferred all-to-all trading solution in the global credit markets, creating a unique liquidity pool for a broad range of credit market participants. Drawing on its deep data and analytical resources, MarketAxess enables automated trading solutions and, through its Trax^® division, provides a range of pre- and post-trade services and products.

MarketAxess is headquartered in New York and has offices in London, Amsterdam, Boston, Chicago, Los Angeles, Miami, Salt Lake City, San Francisco, São Paulo, Hong Kong and Singapore. For more information, please visit www.marketaxess.com.

About LiquidityEdge

LiquidityEdge offers an alternative trading model for the U.S. Treasury market with a choice of relationship-based execution models that deliver direct and order book trading access to a broad range of market participants.

Founded in 2015 by David E. Rutter, LiquidityEdge is an SEC registered broker-dealer and member of FINRA. Clients can choose between one-to-one or many-to-many trading models, facilitating a combination of anonymous and disclosed streaming of executable prices, creating a personalized order book for each participant.

LiquidityEdge is headquartered in New York and has an office in London. For more information, please visit: www.liquidityedge.trade

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements, including statements about the outlook and prospects for Company and industry growth, as well as statements about the Company’s future financial and operating performance. These and other statements that relate to future results and events are based on MarketAxess’ current expectations. The Company’s actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including: global economic, political and market factors; the volatility of financial services markets generally; the level of trading volume transacted on the MarketAxess platform; the absolute level and direction of interest rates and the corresponding volatility in the corporate fixed-income market; the level and intensity of competition in the fixed-income electronic trading industry and the pricing pressures that may result; the variability of our growth rate; the rapidly evolving nature of the electronic financial services industry; our ability to introduce new fee plans and our clients’ response; our exposure to risks resulting from non-performance by counterparties to transactions executed between our clients in which we act as an intermediary in matched principal trades; our dependence on our broker-dealer clients; the loss of any of our significant institutional investor clients; our ability to develop new products and offerings and the market’s acceptance of those products; the effect of rapid market or technological changes on us and the users of our technology; our ability to successfully maintain the integrity of our trading platform and our response to system failures, capacity constraints and business interruptions; our vulnerability to

cyber security risks; our ability to protect our intellectual property rights or technology and defend against intellectual property infringement or other claims; our ability to enter into strategic alliances and to acquire other businesses and successfully integrate them with our business; our ability to comply with new and existing laws, rules and regulations both domestically and internationally; our ability to maintain effective compliance and risk management methods; the strain of growth initiatives on management and other resources; our future capital needs and our ability to obtain capital when needed; limitations on our operating flexibility contained in our credit agreement; and other factors. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. More information about these and other factors affecting MarketAxess’ business and prospects is contained in MarketAxess’ periodic filings with the Securities and Exchange Commission and can be accessed at www.marketaxess.com.

# # #

MarketAxess Media Relations Contacts:

Kyle White

MarketAxess Holdings Inc.

+1 212 813 6355

kwhite@marketaxess.com

Bill McBride

RF | Binder

+1 917 239 6726

MarketAxessPR@rfbinder.com

Investor Relations Contact:

David Cresci

MarketAxess Holdings Inc.

+1 212 813 6027

dcresci@marketaxess.com

LiquidityEdge Media Relations Contact:

Chatsworth Communications

+44 (0)20 7440 9780

contact@chatsworthcommunications.com

XML

Document and Entity Information	Aug. 12, 2019
Cover [Abstract]
Entity Registrant Name	MARKETAXESS HOLDINGS INC
Amendment Flag	false
Entity Central Index Key	0001278021
Document Type	8-K
Document Period End Date	Aug. 12, 2019
Entity Incorporation State Country Code	DE
Entity File Number	001-34091
Entity Tax Identification Number	52-2230784
Entity Address, Address Line One	55 Hudson Yards
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10001
City Area Code	(212)
Local Phone Number	813-6000
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Common Stock, par value $0.003 per share
Trading Symbol	MKTX
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false