By Michael Oneal | New
York trading firm Lightspeed Financial Inc., said Wednesday that it
will acquire the business of Chicago’s Terra Nova Financial Group Inc.
in a deal valued at $27.6 million.  Terra Nova provides direct market
access trading in equities, options and futures for about 3,000 clients
with total assets of around $450 million.

Lightspeed, which has been on the acquisition trail since its inception around four years ago, said the combination would  give the firm a  client base of more than 5,500 traders executing an average of over 150 million equity shares per day.  It’s total client assets will exceed $1.25 billion.

Past Lightspeed acquisitions include retail trading firms Schonfeld & Co., Integrity Trading Inc. and NobleTrading in February 2010.

The companies said that purchase price of $27.6 million consists of an initial cash payment of $22.6 million and a later $5.0 million payment secured by a promissory note bearing interest at a rate of 8 percentt and due within six months of closing.

Terra Nova is a public company run by Chief Executive Bernay Box, who also president of its major shareholder.  It will emerge from the transaction as a holding company with no operations but principal assets consisting of the cash and promissory note.

The company said its board has yet to determine how it will distribute the sales proceeds to shareholders. But based on an assessment of its expenses, assets and liabilities, and taking into account the expected timing of the payment of the Lightspeed promissory note, the company estimated that it will have approximately $24 million to $27 million in cash available for distribution (approximately $0.95 – $1.07 per share).  

The company said it expects to make a substantial initial distribution of cash soon after the closing of the sale of Terra Nova Financial with a further distribution after Lightspeed pays off the promissory note.