Private equity firm KKR & Co. is in advanced talks to acquire OSTTRA, a post-trade services provider, for around US$3 billion.

OSTTRA, a joint venture between CME Group Inc. and S&P Global Inc., offers services for foreign exchange and derivatives markets. It integrates CME’s Traiana, TriOptima, and Reset services with MarkitSERV, which S&P acquired in 2022.

KKR is the leading bidder, competing with private equity firms such as GTCR, Advent International, and CVC Capital Partners.

The deal is not finalized and may face delays or fail.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Post-trade services offer unique resilience amid market turbulence

KKR’s pursuit of OSTTRA highlights the attractiveness of financial infrastructure companies during economic uncertainty.

Post-trade service providers have demonstrated growth even during market volatility, with firms like Cboe Clear Europe capturing 34% market share in cash equities clearing in H1 2023 while expanding their service offerings 1.

These businesses benefit from increased trading volumes during market disruptions, as the article notes OSTTRA has “arguably benefited with trading volumes soaring as investors react to fast-changing proclamations.”

Companies operating financial market infrastructure occupy strategic positions in the value chain, processing transactions regardless of market direction, a quality especially valuable when other sectors face direct tariff impacts.

The post-trade landscape continues evolving through technological advancement and regulatory changes, particularly with Basel 4 implementation and Brexit adjustments, creating both challenges and opportunities for established players 1.

2️⃣ Private equity firms recalibrating acquisition strategies amid tariff uncertainty

The broader context shows private equity facing significant headwinds, with 2023 seeing a 24% decline in deal activity by volume and 30% by value compared to 2022 2.

KKR’s $3 billion OSTTRA acquisition exemplifies how firms are adjusting their focus toward businesses insulated from direct tariff impacts, a significant shift as tariffs have compressed profit margins and introduced valuation challenges for manufacturing-heavy portfolios 3.

PE firms are extending due diligence periods and adopting more flexible deal structures to account for tariff-related uncertainties, with those companies less exposed to international trade potentially commanding premium valuations 4.