GAIN Capital Completes GFT Acquisition – $40 million in Cash Plus Extras

After five months of anticipation, GAIN Capital has finally announced that it has completed its acquisition of GFT. The listed FX broker announced in a notification, that it had acquired the multi-asset broker for $40 million in cash, as well as shares of GAIN Capital and a five-year seller note.

In the official press release, CEO of GAIN Capital, Glenn Stevens stated, “This transaction is an important strategic step in solidifying our leadership position in the industry.”

GAIN Capital, a leading global financial services firm has been gradually extending its global footprint through its expansion plan over the last decade. The latest acquisition highlights the firm’s commitment to develop itself as a multi-asset broker, through the acquisition, GAIN will offer traders a substantial 12,500 financial instruments to trade from.

GAIN Capital paid $40 million in cash for GFT, in addition, GFT received approximately 3.6 million shares of GAIN Capital stock and a $33 million 5-year seller note, and in return GAIN received $73 million in cash at closing.

Metrics:

GAIN published its metrics (Pro forma – assuming that the deal closed on the 1st of January, 2013) for the first 6 months of 2013, these include GFT’s details:

  • Revenue of $190.0 million

GAIN Capital: $122.8 million; GFT: $67.2 million

  • Trading volume through June 30, 2013, $3.6 trillion

GAIN Capital: $2.8 trillion; GFT: $0.8 trillion

  • Retail OTC: $1.3 trillion

GAIN Capital: $899.1 billion; GFT: $391.3 billion

  • Institutional: $2.3 trillion

GAIN Capital: $1.9 trillion; GFT: $0.4 trillion

  • Client assets as of June 30, 2013, $683.8 million

GAIN Capital: $475.6 million; GFT: $208.2 million

GAIN Capital’s share price is trading in the green, at 11.98.

GAIN Capital informed its clients about the acquisition in an email notification, stating, “As we begin the integration process, it will be ‘business as usual.’  All aspects of your relationship with GAIN remain the same.  There will be no change to the way you or your customers trade, your commercial terms, the GAIN group entity which is counterparty to your trading activity, or the level of service you receive. You will have access to the same team, and we will make every effort to ensure that your everyday interactions with us go smoothly.”

“The acquisition of GFT will yield numerous benefits for our clients, partners and shareholders,” said Glenn Stevens, Chief Executive Officer of GAIN Capital. “The combined company boasts a deeper global footprint, a robust offering of more than 12,500 financial products, and industry-leading trading technology. We intend to use GFT’s broad product offering, innovative tools and educational capabilities to further strengthen our competitive position, while realizing significant synergies from combining the best of both organizations,” Stevens concluded.

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