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Successful Forex Deal: GAIN Reveals Details of GFT's Performance

On September 24, 2013, GAIN Capital - the financial giant behind FOREX.com, announced the completion of the acquisition of Global Futures & Forex, Ltd. (GFT) – a Michigan-based Forex business. And, in accordance with regulations, GAIN has just published the performance metrics of the recently acquired business for the years to the end of December 2010, 2011 and 2012, as well as for the six months to the end of June 2013. 
 
The picture that the results paint shows us GAIN has made a wise move in acquiring GFT, with the institutional segment of the business being particularly robust throughout the period covered by the reports. 
 
But for starters, let's remind you that for several quarters in a row, GAIN has been pressing ahead with the strategy of the three pillars: building its business across retail, institutional Forex and exchange-based trading. The acquisition of GFT was a part of the company's efforts to beef up its institutional Forex segment – thereby gaining access to stickier clientele and stickier revenues. 
 
For that matter, let's look at how GFT's institutional business performed. I know that many would have simply looked at the key performance metrics like net profit and revenues and, indeed, they dropped from 2010 to the end of 2012. In 2010, GFT recorded a net profit of $10.4 million, while in 2011 this turned into a $3.8 million loss and in 2012 the fortunes of the company soured and it posted a net loss of $34.1 million. Net trading income also staged a drop – in 2012 it was only $88.4 million, compared with $136.7 million in 2011. 
 
And now you must be thinking: “Big deal! GAIN simply bought an ailing business in order to get a grip over some extra clients.” But I'll prove you wrong, as the management of GAIN knows what to look at, when it aims to buy a business. And obviously they observed the steady performance of the commission-based business. The income from commissions has been steeply rising – in 2010 it equaled $2.1 million; in 2011 it rose to $2.5 million; and in 2012 it jumped to $6.9 million. This must have impressed GAIN. In the first six months of 2013, this segment continued to thrive, with commission-based income at $3.34 million, up from $2.25 million a year earlier. Meanwhile, the trading revenues have also improved on an annual basis. We are not talking about a struggling business entity anymore.
 
The real effects from the acquisition on GAIN's performance will be visible when the company reports its metrics for the fourth quarter of 2014. Chances are we'll see some substantial contribution to the institutional segment of GAIN thanks to GFT, as the company apparently managed to carry out a successful acquisition.
 
 

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  forex.com. forex.com broker  us forex broker  gft  gft acquisition  forex m&a  forex acquisition  institutional forex  forex performance  gft performance  revenues  profit  commissions 

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