KCG Holdings Inc.
) recently signed an agreement to sell its subsidiary - Urban
Financial Group (Urban) - to an investor group. The deal is
subject to certain regulatory approvals and is expected to close
by fourth-quarter 2013.
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KCG Holdings was formed last month after Global Electronic
Trading Company or Getco LLC acquired the troubled automated
trading firm - Knight Capital Group. Notably, in Jun 2013, Knight
Capital Group sold its credit-brokerage division to
Stifel Financial Corp.
), while earlier this year Getco closed its office in Hong Kong.
Therefore, Knight Capital and Getco were on a restructuring and
streamlining spree, which continues even after the completion of
Amid sluggish economic backdrop with limited scope for increasing
revenues, KCG holdings intend to streamline business and focus on
its core business of security trading. Notably the current
divestment plan will release approximately $80.0 million,
comprising cash as well as retained net assets.
On the other hand, Brian Libman, who heads the investor group to
acquire Urban, relies on its financials, market share gains and
operating excellence. He intends to capitalize on these positives
and deliver enhanced services to customers amid the current
Bank of America Corporation
) is acting as an advisor to KCG Holdings on the divestment deal.
The deal will enable KCG Holdings focus on its area of
specialization and prudently manage costs, thereby driving
Currently, KCG Holdings carries a Zacks Rank #3 (Hold). A better
performing stock in the same sector is
TD Ameritrade Holding Corp.
), which has a Zacks Rank #1 (Strong Buy).