LMAX agrees to buy out Betfair majority stake

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The management of LMAX Exchange, the open order book FX and metals multilateral trading platform, has agreed to buy out the majority stake in the business held by online betting company Betfair.

The LMAX management buyout is backed by a group of private investors that includes Betfair co-founder Ed Wray. The final deal is subject to FSA approval.

"The LMAX Exchange business has great momentum," says Wray. "As a result, and as a long-standing passionate advocate of the exchange model, I am very excited to be part of the team buying the business."

Betfair – which has recently come under new management – agreed to the LMAX management buyout after making a decision to focus on its core business investments rather than maintain a controlling stake in the FX exchange.

Betfair would, however, retain a 33% stake in LMAX under the terms of the deal.

Since its launch in April 2011, LMAX has set itself apart from the rest of the FX dealer platform space with a unique business model that could one day give it the edge needed to succeed in the crowded space in the market.

There were more than a dozen new FX multi-dealer platforms launched in 2012 by a variety of players, many of which were looking to cater to institutional clients.

However, after 16 months and seven quarters of consecutive growth, LMAX has a fully funded three-year business plan and is consistently outperforming its growth targets.

The platform has delivered 20% monthly growth in trading volumes, revenues and client numbers since October 2011.

"Our new status as an employee-owned company gives the business the required flexibility to rapidly grow and evolve," says LMAX CEO David Mercer. "We have a clear strategy and roadmap to build LMAX Exchange into a leading FX venue globally in three to five years."