Cboe Global Markets to Acquire NEO


Global market infrastructure and tradable products provider Cboe Global Markets, Inc. (CBOE) recently announced that it has entered into a definitive agreement to acquire Canadian fintech organization, Aequitas Innovations, Inc., popularly known as NEO. The terms of the deal, which is likely to close in the first half of 2022, have not been disclosed so far.

Following the news, shares of the company gained marginally to close at $131 on Monday.

Implications of the Deal

With a fully registered Tier-1 Canadian securities exchange and a wide range of product and services from corporate listings to cash equity trading, NEO is expected to fuel more trading activity on Cboe markets and improve efficiencies for investors and capital-raisers in both Canada and the U.S.

Notably, with MATCHNow already in its repertoire and with the eventual addition of NEO, Cboe will be able to provide a comprehensive equities platform for the Canadian markets, market data feeds, access services, listings and distribution services for non-listed securities.

Management Commentary

The CEO of Cboe, Ed Tilly, said, “Adding NEO to the Cboe network better enables us to create a first-class equities offering in Canada, bolstering our global markets in North America, Europe and Asia Pacific, and bringing us one step closer to our vision of building one of the world’s largest global derivatives and securities trading networks.”

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Price Target

Recently, Morgan Stanley analyst Michael Cyprys reiterated a Sell rating on the stock with a price target of $121, which implies downside potential of 7.6% from current levels.

Consensus among analysts is a Strong Buy based on 3 Buys, 1 Hold and 1 Sell. The average Cboe price target of $134.25 implies upside potential of 2.5% from current levels.

Smart Score

Cboe scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained 48.5% over the past year.

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