With more than $500 billion in U.S. Treasury’s changing hands daily, NASDAQ sought an entry into the world’s largest and most liquid cash markets. It did so by purchasing eSpeed from BGC Partners, Inc.

While the stock market is currently trading at record levels, it has been depressed in the past few years, and NASDAQ wanted to diversify beyond stock trading by looking for more exposure in fixed income markets.

The purchase agreement between BGC and NASDAQ includes the sale of eSpeed brand name and other assets. The sale includes several contracts covering the fully electronic portion of BGC’s benchmark, on-the-run, U.S. treasury brokerage, market data and colocation service businesses.

All of these assets will be sold for a cash purchase price of $750 million, plus an earn-out of up to $484 million in NASDAQ OMX common stock, which will be paid following the closing over 15 years.

Under the terms of the contract, BGC has agreed not to compete with NASDAQ OMX for three years following the closing of the transaction in fully electronic, on-the-run, benchmark U.S. Treasury Notes and Bonds.

“The assets we are selling generated just under $100 million in revenues in 2012, and constituted less than 6 percent of our overall revenues for last year - while analysts following us currently expect BGC to generate around $1.85 billion in revenues3 for 2013. Consequently, we think that the market was clearly under-valuing the assets of the Company. This transaction should better enable investors and analysts to place an accurate valuation on BGC's assets post-closing,” said Howard W. Lutnick, Chairman and chief executive officer at BGC Partners.

NASDAQ will be competing with Eurex and Liffe in Europe when it launches its NLX European-based fixed income futures trading platform. The financial advisor for NASDAQ on the deal was Deutsche Bank.