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GAIN Capital Finalizes GFT's Acquisition

GAIN Capital Inc., the financial giant behind leading US FX broker FOREX.com, has just announced the official completion of the acquisition of Global Futures & Forex, LTD (GFT). It was about time for the announcement to pop up, as GAIN's management had said as early as April that the transition would be finalized in the third quarter of the year and that deadline was approaching at a fast pace.

 

This is the right time for a recap of some of the financial details of the deal: the overall purchase price of GFT summed up at $107.8 million, of which $40 million was paid in cash, $40 million in a five-year seller note, while the rest was funded with the issuance of some 4.9 million shares of GAIN's common stock. 

 

These may loom as some very impressive numbers had not GAIN published the expected synergies – these are set to reach between $35 million and $45 million in the first full year following the closure of the deal. GAIN says the acquisition itself will be accretive to its earnings in the fourth quarter of the year.

 

Meanwhile, for lovers of numbers and for those who'd like to see how the two businesses combine, GAIN also revealed financial and operating metrics for the first half of the year, explicitly mentioning the results of GFT too. From the data we see that overall revenues for the first six months of the year totaled $190 million, with GFT accounting for $67.2 million of those. Operating metrics were strong too, with GFT also contributing to those: trading volumes until the end of June 2013 reached $3.6 trillion, and GFT accounted for $800 billion of that, with its contribution being relatively equal in both institutional and retail trading terms.

 

We can't wait to see how this combination works out – for the time being, the results are encouraging.

 

 

You can view the complete press release below.

 

GAIN Capital Completes Acquisition of GFT

 

BEDMINSTER, N.J., Sept. 24, 2013 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) (the "Company" or "GAIN Capital") today announced it has completed the acquisition of Global Futures & Forex, LTD ("GFT").

 

"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," continued Mr. Stevens. "This transaction is an important strategic step in solidifying our leadership position in the industry." 

 

Pro forma first half 2013 financials include:

 

- Revenue of $190.0 million (GAIN Capital: $122.8 million; GFT: $67.2 million)

- Pro forma trading volume through June 30, 2013 of $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)

- Pro forma client assets as of June 30, 2013 of $683.8 million (GAIN Capital: $475.6 million; 

GFT: $208.2 million)

 

Highlights of the acquisition include:

 

Operating synergies of $35 million - $45 million in the first full year following closing

Acquisition expected to be accretive to fourth quarter 2013 earnings

 

Under the terms of the transaction, the purchase price is comprised of $40 million in cash, approximately 3.6 million shares of GAIN Capital stock and an approximately $33 million 5-year seller note.  GAIN received approximately $73 million of GFT cash at closing.

 

GFT clients should expect a smooth transition.  GAIN Capital will provide frequent communication as information about enhancements to service and opportunities to access new and updated features becomes available.

 

 

About GAIN Capital

 

GAIN Capital Holdings, Inc. (NYSE: GCAP) is a global provider of online trading services. GAIN's innovative trading technology provides market access and highly automated trade execution services across multiple asset classes to a diverse client base of retail and institutional investors.

 

GAIN's businesses include FOREX.com, which provides retail traders around the world access to a variety of global OTC financial markets, including forex, precious metals and CFDs on commodities and indices; GTX, a fully independent FX ECN for hedge funds and institutions; OEC, an innovative online futures broker; and GAIN Securities, Inc. (member FINRA/SIPC), a licensed U.S. broker-dealer.

 

GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America,Europe and the Asia Pacific regions.  For further company information, visit www.gaincapital.com.

 

 

 

TAGS: gain capital inc  gain capital forex  forex.com  forex.com broker  gft  gft acquisition  forex acquisition  us forex broker  forex m&a  corporate deals  us forex 

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