The UK’s Financial Services Authority has approved the transaction and it should close in July.
The 1,700-strong New York-based firm will pay an initial £22.4m in cash, followed by GFI shares valued at £15.9m. Its acquisition of the remaining 30% stake in the group will depend on Kyte’s performance over a three year period to June 30, 2013.
The transaction will increase GFI’s non-Gaap earnings for the 2010 calendar year, the company expects.
Kyte is an independent futures commission merchant offering front, middle and back office clearing and execution services on cash and derivatives exchanges, including through an arcade model.
Its customers are professional traders, market makers, algorithmic systems and fund managers. The company is consistently among the top five firms trading on NYSE Liffe and the top 20 on Eurex.
A private company, it was established in London by David Kyte in 1985. Through Kyte Capital Advisors, it also manages external investors’ funds. The company offers seed capital to start-up trading groups, small hedge funds, market-makers and sole traders.
In its last fiscal year, Kyte brought in £115.4m of revenue, £22.5m of gross profit and £11.7m of pre-tax profit.