Refco Group Ltd., the world's largest futures brokerage, said on Tuesday buyout firm Thomas H. Lee Partners agreed to buy a "major stake" in the company in a deal that values it at $2.25 billion.
New York-based Refco didn't disclose the size of the stake that Boston-based Thomas H. Lee is buying or other financial details. It said the investment would allow it to "recapitalize its ownership structure while securing Refco's long-term strategic direction."
Thomas H. Lee, one of the largest leveraged buyout firms with $6.1 billion in its latest fund, said the purchase fits with its strategy of "investing in growth companies with leading market positions and strong management teams."
The move demonstrates that buyout firms have an enduring interest in exchange assets, which generate steady cash flow that can be borrowed against to finance a buyout.
Boston-based Parthenon Capital, for instance, in April made an unsolicited offer of nearly $1 billion for a stake in the New York Mercantile Exchange, or NYMEX. And Blackstone Group has invested in the London International Financial Futures and Options Exchange, while and Hellman & Friedman now owns a minority stake in Nasdaq.
Refco is a major broker of foreign exchange contracts, options, government bonds, emerging market debt and one of the world's biggest clearing firms for derivatives.
Credit Suisse First Boston advised Refco, while Sandler O'Neill & Partners advised Thomas H. Lee.
