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Top of the Morning
Virtu Financial (Nasdaq: VIRT) has agreed to acquire rival high-speed trading firm KCG Holdings (NYSE: KCG) for approximately $1.4 billion in cash, or $20 per share (12.74% premium over yesterday's closing price).
- Why it's the BFD: High-frequency traders might have lower concerns today about increased regulatory scrutiny (let alone a financial transaction tax, which was favored by Hillary Clinton), but it's still been a tough slog of late due primarily to low volatility in U.S. equities. So this is an attempt to make it up on volume, plus allows Virtu to move into the retail wholesaler market. Also worth noting that Virtu's executive chairman is Vincent Viola, who was nominated by President Trump to be U.S. Army Secretary, but later bailed after saying it would be too hard to disentangle his business interests.
- Bottom line: "All this low volume and low volatility is having an impact on the stock trading business. It doesn't matter the markets are near new highs. If no one is trading, or everyone is moving to passive investing, well, that is a big problem." ― Bob Pisani
Venture Capital Deals
Private Equity Deals
• Alpine Immune Sciences, a Seattle-based provider of protein-based immunotherapies targeting the immune synapse, has agreed to a reverse merger with Nivalis Therapeutics (Nasdaq: NVLS). Following the transaction, Alpine shareholders will hold 74% of the combined company, which will be led by current Alpine CEO (and former Dendreon head) Mitchell Gold. Alpine had raised around $48 million in VC funding from firms like Orbimed, Frazier Healthcare and Alpine BioVentures. http://bit.ly/2oStxOo