KCG Holdings (KCG), General Atlantic Report Share Exchange

November 17, 2016 5:41 PM EST

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KCG Holdings, Inc. (NYSE: KCG) today announced that it has entered into a strategic transaction with General Atlantic, a global growth equity firm. Under the terms of the transaction, KCG will exchange 8.9 million shares it owns of Bats Global Markets, Inc. (Bats: BATS) for all of General Atlantic's 18.7 million shares and 8.1 million warrants of KCG. In 2007, General Atlantic invested in GETCO, a predecessor to KCG. The transaction is expected to close by the end of November, with a portion of the warrants to be settled in early January 2017.

As a result of this transaction, KCG's total outstanding share count will be reduced by 18.7 million shares from total outstanding shares (including restricted stock units) of 86.2 million as of September 30, 2016, and its outstanding warrants will be reduced to 5.1 million from 13.2 million. Accordingly KCG's tangible book value is estimated to increase from the September 30, 2016 value of $15.54 by approximately $3.25 per share as a result of its sales in Bats including the share exchange.

Daniel Coleman, Chief Executive Officer of KCG, said, "We are pleased to have achieved such a positive outcome for both KCG and General Atlantic, our long-time partner. We believe the accretive nature of this transaction further strengthens our efforts to create significant value for our shareholders today and for years to come."

KCG was advised on the transaction by Jefferies LLC and Sullivan & Cromwell LLP.

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