8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 31, 2013

KCG Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	000-54991	38-3898306
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

545 Washington Boulevard Jersey City, New Jersey	07310
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (201) 222-9400

Not Applicable

Former Name or Former Address, if Changed Since Last Report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

¨  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.       Entry Into a Material Definitive Agreement.

               On July 29, 2013, KCG Holdings, Inc. (“KCG”) and Knight Libertas Holdings, LLC (“Libertas”), a Delaware limited liability company and an indirect wholly owned subsidiary of KCG, entered into a Stock Purchase Agreement (the “Agreement”) with UFG Holdings, LLC, a Delaware limited liability company owned by an  investor group led by Brian Libman (“UFG”).  Pursuant to the Agreement, Libertas has agreed to sell, and UFG has agreed to purchase, Urban Financial Group, Inc. (“Urban”), an Oklahoma corporation and a wholly owned subsidiary of Libertas, for total proceeds of approximately $80 million to KCG representing a combination of cash consideration and retained net assets (the “Transaction”).  The Agreement provides that, subject to the terms and conditions thereof, prior to the closing of the Transaction, Urban will be converted from an Oklahoma corporation to a Delaware limited liability company. 

               The Agreement contains customary representations and warranties from Urban, Libertas and UFG, and each of Libertas and UFG have agreed to customary covenants, including, among others, covenants relating to the conduct of Urban’s business during the interim period between the execution of the Agreement and the closing of the Transaction, certain non-solicitation and non-compete covenants customary in a transaction of this type, and each party’s obligation to take reasonable best efforts to obtain required regulatory approvals necessary to consummate the Transaction.  Completion of the Transaction is subject to certain customary conditions, including receipt of required regulatory approvals by the Government National Mortgage Association (GNMA), the U.S. Department of Housing and Urban Development (HUD), the Federal National Mortgage Association (FNMA), and states and territories in which Urban operates and the absence of any law or order prohibiting the consummation of the Transaction.  Each of UFG’s and Libertas’s obligation to complete the Transaction is also subject to certain additional customary conditions, including, subject to certain exceptions, the accuracy of the representations and warranties of the other party and performance in all material respects by the other party of its obligations under the Agreement.

               The foregoing description of the Transaction and the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, which will be filed as an exhibit to KCG’s next quarterly report on Form 10-Q.

               On July 30, 2013, KCG issued a press release announcing the Agreement and the Transaction, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference. 

Item 9.01.       Financial Statements and Exhibits.

(d)  Exhibits.

Exhibit Number	Description
99.1	Press Release of KCG Holdings, Inc., dated July 30, 2013.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

KCG HOLDINGS, INC.

Date: July 31, 2013                                               By:      /s/ Andrew M. Greenstein          

Andrew M. Greenstein

Managing Director, Deputy General Counsel and Assistant Secretary

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release of KCG Holdings, Inc., dated July 30, 2013.

EX-99.1

 

KCG Holdings, Inc.

545 Washington Boulevard
Jersey City, New Jersey 07310

1 201 222 9400 tel

1 800 544 7508 toll free

www.kcg.com

KCG ANNOUNCES SALE OF URBAN FINANCIAL GROUP

TO INVESTOR GROUP

JERSEY CITY, New Jersey – July 30, 2013 – KCG Holdings, Inc. (NYSE: KCG) today announced it has entered into an agreement to sell subsidiary Urban Financial Group (Urban) to an investor group led by Brian Libman. The transaction is expected to be completed in the fourth quarter of 2013 and generate total proceeds of approximately $80 million to KCG representing a combination of cash consideration and retained net assets.

Urban is one of the largest originators of home equity conversion mortgages (HECM), also referred to as reverse mortgages, in the U.S. The company is headquartered in Tulsa, OK and licensed to operate in 43 states and 3 territories. In addition, Urban is an approved issuer under the Government National Mortgage Associate (GNMA) HECM Mortgage-Backed Securities (HMBS) program.

Brian Libman commented, “Urban Financial Group is well-positioned to capitalize on the significant growth opportunities in the promising reverse mortgage originations market. The lender has demonstrated market share gains, operational excellence and solid growth fundamentals. I look forward to working with management to extend Urban’s track record of success.”

Steve McClellan, CEO of Urban, said: “The Urban management team is looking forward to working with Brian and his investor group. Urban was acquired on the strength of our team and our high level of client service and I am confident that as we work together to invest further in the business, we will be well-positioned to take advantage of the market’s current and future opportunities.”

KCG made the decision to divest Urban after a thorough strategic review resulted in a renewed focus on core market making and agency execution services.

The transaction is subject to customary closing conditions, including regulatory approvals by GNMA, the U.S. Department of Housing and Urban Development (HUD), the Federal National Mortgage Association (FNMA), and the states and territories in which Urban operates.

The financial advisors to KCG on the transaction are Bank of America Merrill Lynch and the legal advisors are Wachtell, Lipton, Rosen & Katz.

About KCG

KCG is a leading independent securities firm offering investors a range of services designed to address trading needs across asset classes, product types and time zones. The firm combines advanced technology with exceptional client service across market making, agency execution and venues. KCG has multiple access points to trade global equities, fixed income, currencies and commodities via voice or automated execution. www.kcg.com

 

 

Cautionary Note Regarding Forward Looking Statements
Certain statements contained herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "target," "estimate," "continue," "positions," "prospects" or "potential," by future conditional verbs such as "will," "would," "should," "could" or "may," or by variations of such words or by similar expressions. These "forward-looking statements" are not historical facts and are based on current expectations, estimates and projections about the parties' industry, management beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict including, without limitation, risks associated with: (i) the merger of Knight and GETCO, including, among other things, (a) difficulties and delays in integrating the Knight and GETCO businesses or fully realizing cost savings and other benefits, (b) the inability to sustain revenue and earnings growth, and (c) customer and client reactions; (ii) the August 1, 2012 technology issue at Knight that resulted in Knight's broker-dealer subsidiary sending numerous erroneous orders in NYSE-listed and NYSE Arca securities into the market and the impact to Knight's capital structure and business as well as actions taken in response thereto and consequences thereof; (iii) the costs and risks associated with the Company’s sale of its reverse mortgage business; (iv) the ability of Knight’s broker-dealer subsidiary to recover all or a portion of the damages that are attributable to the manner in which NASDAQ OMX handled the Facebook IPO;  (v) changes in market structure, legislative, regulatory or financial reporting rules; and (v) past or future changes to organizational structure and management. Readers should carefully review the risks and uncertainties disclosed in KCG's and Knight's reports with the SEC, including, without limitation, those detailed under "Certain Factors Affecting Results of Operations" and "Risk Factors" in Knight's Annual Report on Form 10-K for the year-ended December 31, 2012 and in Knight's Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2013, and in other reports or documents KCG files with, or furnishes to, the SEC from time to time and those detailed in the Joint Proxy Statement / Prospectus of KCG related to the merger of Knight and GETCO under the heading "Cautionary Statement Regarding Forward Looking Information" and "Risk Factors," among others.

CONTACTS

Sophie Sohn                                                          Jonathan Mairs

Communications & Marketing                                 Investor Relations

312-931-2299                                                        201-356-1529

media@kcg.com                                                    jmairs@kcg.com