CMC Markets will not float for at least a year

CMC Markets, the London-based spreadbetting firm, will not be floated next year and will focus instead on building value after Thursday’s deal with Goldman Sachs Group Inc. (GS).

CMC plans to work with Goldman Sachs to provide services for the investment bank and its clients, executive chairman and founder of the company Peter Cruddas said in an interview.

“Flotation is a natural progression for us, but there is no logic in doing that in 2008. I want to get the Goldman Sachs opportunities off the ground next year to grow the value of CMC’s business organically,” Cruddas said.

Goldman has agreed to purchase a 10% stake in CMC, the company said earlier Thursday. The deal leaves Cruddas holding around 85% of the remaining shares, with the other 5% held by staff of CMC.

Cruddas tried to float CMC in May 2006, but pulled the deal an hour before the listing amid volatility that had seen the market fall by 10% since the start of roadshows.

He said he was happy the float didn’t happen as he is “delighted” with the Goldman Sachs transaction. Cruddas declined to comment on the value of the deal, but the Financial Times said it could be worth up to GBP140 million.

Cruddas said Goldman approached him about buying some of his shares in CMC six months ago. He rejected the offer at first, but then changed his mind because it would bring business to CMC. “I’m not interested in selling more than 10%. I won’t be selling any shares next year,” he said.

Cruddas added that he may work with Goldman Sachs on the acquisition front. He does not have a specific target in mind, but says that CMC is looking to buy outside the U.K.

CMC was established as a foreign exchange market maker in 1989. It launched an online foreign exchange platform in 1996 and branched out into contracts for difference in 2000.

The company handled over 16.2 million trades between November 2006 and October 2007. The trades that were executed in that period were worth $1.1 trillion.

It plans to open a further six to eight offices in the next 18 months and Cruddas said he is confident that the business will grow organically by 40% next year.

Tags: CMC, CMC Markets, cmcmarkets, Goldman Sachs, ipo

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