Futures and options OEM Trading Technologies (TT) could soon be snapped up by Cboe from private equity firm 7Ridge, after an exit option was activated, according to regulatory filings. The potential acquisition has been flagged by analysts at BofA.
Trading Technologies (TT) was acquired by private-equity house 7Ridge in 2021. Cboe, a limited partner in the 7Ridge fund, negotiated an exit option that could be triggered either when TT hit pre-set performance goals or from January 2026. Cboe’s latest 10-K shows those targets have already been met, meaning Cboe can now exercise the exit option and take over TT.
7Ridge Investments 3 LP acquired Trading Technologies (TT) in late 2021, in a deal that valued the futures-trading Order Execution Management System (OEMS) at US$500 million. Cboe supplied 40 per cent of the fund’s capital and has treated the stake as an equity-method investment ever since.
Under the partnership agreement, Cboe secured an exit option allowing it, or any other limited partner, to buy 100 % of TT once the business either satisfied defined revenue and profitability hurdles or after January 2026. Cboe’s latest 10-K filing describes the mechanism in detail, noting that if the LPs decline to exercise, 7Ridge can put TT up for sale to a third party instead.
That clock has accelerated. Cboe disclosed that, in January 2025, the general partner certified the performance goals have been achieved, and the option is now exercisable.
Bank of America analysts highlighted the disclosure in a mid-April note:
“In their latest annual filing, Cboe disclosed that its exit option to acquire Trading Technologies became exercisable in January.”
The report adds that Cboe’s “dry powder spiked 28 % quarter on quarter,” giving the group ample balance-sheet capacity to fund a larger deal after years of sub-US$500 million acquisitions
TT itself has grown rapidly; revenues climbed from US$98 million in 2021 to US$170 million in 2023. OEMS transactions in comparable deals have cleared about seven- or eight-times sales, implying a potential valuation north of US$1 billion if the option was to be exercised at market multiples.
TT’s front end would be a way to deepen institutional use of its flagship SPX index-options franchise, where retail platforms account for about 90 % of customer flow, according to Bank of America analysts. They add that TT’s connectivity to seventy-plus venues and its futures heritage could accelerate that push.
The exchange is simultaneously litigating with the U.S. SEC after the regulator rejected Cboe’s proposal to exempt exchange-affiliated OEMSs from certain reporting rules. “Cboe is now litigating the matter in the Federal court system,” the BofA note reminds investors.
Cboe has not said whether it plans to exercise the option or negotiate an early buy-out, but the window is open. If the Chicago-based group moves ahead, it would mark its first billion-dollar-plus transaction since the BATS Global Markets takeover in 2017. Jill Gribenow, chief financial officer, pointed out during Cboe’s last earnings call, on 7 February, that :
“Given we [Cboe]were in the succession planning process and given it wasn’t public, [Cboe] just decided that it wasn’t appropriate for [Cboe] to be out in the market repurchasing stock”.
This leads bank of America analyst to note that :”Dry powder has spiked 28%”.
CEO, Fred Tomcsyk, has announced a focus on organic growth but reiterated about M&A: “It has to make strategic sense and financial sense and move the needle.”
Cboe, like CME have seen major growth in volume through retail involvements in markets.
Read more: CME chases increased volume in return for lower fees with Robin Hood deal.
Cboe Global Markets declined to comment on the potential transaction.
