South Street Securities Holdings to Acquire GX2 Systems

South Street Securities Holdings, Inc. will acquire all of the equity interests of GX2 Systems, LLC including GX2’s wholly owned broker-dealer subsidiary, GX2 Spread Markets, LLC. This transaction is expected to accelerate South Street’s transformation as a leading technology-enabled provider of multi-asset class securities financing, processing, execution, analytics, and information services.

GX2 is an innovative financial market software engineering company specializing in the development and implementation of next-generation U.S. Treasury (UST) securities liquidity and related analytical solutions. Through a proprietary platform installed on the desktop of its institutional clients and offered on a platform as a service (PaaS) basis, GX2 provides algorithmic, agency brokerage and principal execution liquidity solutions to its growing network of institutional clients, along with direct exchange connectivity, real-time pricing of cash and futures markets, and post-trade reporting services. GX2’s software is being developed by a team of engineers and financial industry veterans synthesizing the best of financial market structure, asset class attributes, application functionality, and scale.

Jim Tabacchi, Chief Executive Officer of South Street, commented, “The acquisition of GX2 will allow South Street to be better positioned to serve our clients with cutting-edge algorithmic, agency brokerage and principal market making liquidity solutions in U.S. Treasuries. The combination of our expertise and resources will enable us to deliver even more value to our growing network of institutional clients.”

GX2’s Chief Executive Officer, David Jaberg, added, “The entire GX2 team is excited to bring our highly complementary expertise in U.S. government securities, our ExMode proprietary execution platform, our RTPL post-trade risk system, and our growing institutional client network to enhance South Street’s offerings and expand our reach within the financial industry.” Mr. Jaberg will join the South Street executive committee after transaction closing which is expected in the fourth quarter of 2023 subject to regulatory approval. GX2 will operate from its current Chicago, IL office and from South Street’s headquarters in New York, NY.

The commercial efficacy of GX2’s software engineering and product design is evidenced by GX2’s growth, momentum, and adoption rate. Since commercial launch of its flagship product ExMode in 2015, a fully-hosted execution platform for customized UST spreads of multiproduct relative value relationships, GX2 has grown to 380+ unique users operating within many large financial institutions, including primary dealer banks, institutional fund management firms, hedge funds, proprietary trading firms and regional broker-dealers.

Rob Creamer, President & CEO of Geneva Trading, the previous majority owner of GX2, commented, “Geneva prides itself on building and supporting exceptional individuals and teams, and it has been an honor to support GX2 from its founding to this exciting transition.  From our initial conversations, it was clear to me that Jim and South Street’s leadership team has an ambitious plan to leverage their combined operations that align with GX2’s unique capabilities and resolute commitment to providing a superior experience to its customers. We are thrilled to have helped build such an outstanding business and we are eager to see it continue to grow and ultimately realize its enormous potential.”

Advisors

Milbank LLP and Vedder Price LLP are serving as legal advisors to South Street. SHEUMACK GMA is serving as exclusive strategic and financial advisor to the Board of Managers of GX2 Systems, LLC. and Katten Muchin Rosenman is serving as legal advisor to GX2.

About South Street Securities Holdings

South Street Securities Holdings, Inc. operates through its subsidiaries, including South Street Securities LLC, a registered broker dealer specializing in repo financing of U.S. Treasuries, Agency MBS, TBA mortgage origination hedging and equity finance; Matrix Applications, LLC, a technology and back-office services company; South Street Capital Management, LLC, an asset management company; and AmeriVet Securities, Inc., a service-disabled veteran and minority owned broker dealer.

About GX2 Systems

Formed in Chicago in 2013, GX2 Systems, LLC is a financial market software engineering company specializing in the development and implementation of next-generation U.S. Treasury securities liquidity solutions across the spectrum of agency brokerage, principal market making and algorithmic trading. Through a state-of-the-art proprietary platform as a service, offered as a desktop application or through a FIX API, GX2 provides its institutional clients direct exchange connectivity, real-time pricing of UST cash and futures markets, and post-trade reporting services. GX2’s software was developed internally by an experienced team of software engineering and trading veterans with the objective of delivering high quality, low latency, market microstructure-based execution to each of our users.  All business activities requiring a regulated environment are conducted through its wholly owned broker-dealer subsidiary, GX2 Spread Markets LLC, a FINRA/SIPC member broker-dealer and CFTC/ NFA registered introducing broker.