Alongside Q2 results TMX Group (X) announced an $800M investment in MEMX Group, the product of a merger between MEMX and BOX. With TMX rolling its existing BOX stake, the 59% pro-forma ownership slaps a $2.3B price tag on the entity - or 17x EBITDA…

… above where the company trades today, which is justified given the relative attractiveness of the derivatives business within its broader portfolio.

Once closed, 10% of US listed options volume will sit under the TMX umbrella - and with the overall market clocking mid-teens growth consistently…

… bulking up its exposure makes a lot of sense. The only potential pushback from investors could be on timing - with the company’s recent $683M RAFI and $409 CBOE deals pushing leverage above target…

… and this one likely to extend the return to normal timeline to some degree.

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