Canada’s TMX Group is making significant moves in the U.S. market with its acquisition of MEMX and BOX Options Market. This strategic merger creates a new entity named MEMX Group, valued at approximately $2.3 billion, where TMX will invest around $800 million in cash alongside its existing interest in BOX. This new group will encompass three U.S. options exchanges, one equities exchange, and a dedicated market technology division.
Who is leading the new MEMX Group? The experienced Jonathan Kellner, currently the CEO of MEMX, will assume leadership of this combined organization. TMX's CEO, John McKenzie, emphasizes that this transaction leverages complementary strengths that support global growth. The forecasted revenue for 2025 is projected to be around $280 million, reflecting significant earning potential with an anticipated adjusted EBITDA near $134 million, indicating an impressive EBITDA margin of nearly 48%.
What impact will this have on the U.S. options market? The MEMX Group aims to capture nearly 10% of U.S. options market volume, reshaping the competitive landscape as the deal heads for regulatory approval, expected to finalize in the second half of 2027.
Understanding the backstory of MEMX and BOX MEMX, short for Members Exchange, was established in 2019 to enhance competition and transparency in the U.S. equities space. After launching equities trading in 2020, it transitioned into options trading in 2023. On the other hand, BOX Options Market has operated since 2008 and has been under TMX's majority ownership for much of its history, specializing in both electronic and floor-based equity options trading. Key players like Jane Street, Morgan Stanley, and Citadel Securities are reinvesting in the new arrangement, indicating strong industry support.
What does this merger mean for the market? This merger highlights the ongoing consolidation within the U.S. exchange landscape, where major players have gradually combined their operations. The NYSE is owned by Intercontinental Exchange, Cboe Global Markets manages a variety of options and equities venues, and Nasdaq runs its set of exchanges. This transaction, backed by a $2.3 billion valuation and a projected annual revenue of $280 million, reflects a revenue multiple of about 8x, presenting a compelling opportunity for market participants and investors alike.