industry watch FX FX RETAIL BROKERS Mergers, Aquisitions and IPOs
We’ve seen a series of industry restructuring and strengthening moves in the last 3 months including several Mergers and Acquisitions and IPOs. In September, several M&As confirmed the intention from the biggest brokerage firms to join forces and solidify their position in the industry with stronger entities and broader international presence, to cope with a rapidly changing market.
FXCM acquired a 50.1% stake in American FX intelligence company Faros Trading LLC.
FXCM’s CEO Drew Niv now explained that “the
acquisition of Faros expands FXCM’s institutional business, adding industry leading market intelligence and client services to the execution platforms we
offer. The combination
should expand our market reach and deliver a compelling suite of services to institutional FX traders.”
Gain officially took over GFT on September 24 – which was also the main reason mentioned by FXCM for dropping its offer to buy Gain Capital earlier this year. The same day GCAP shares closed at an all-time high of $12.06 and its market value reached approximately 475 million USD.
Swissquote Bank made a big step in acquiring a 100 percent holding in MIG Bank on 25 September 2013 creating the dominant Swiss forex broker. After Swissquote purchased ACM (Advanced Currency Markets) in October 2010, this new acquisition will enable Swissquote to greatly expand its forex operations, which at a volume of CHF 158 billion accounted for 26.2 percent of total net revenues in the first half of 2013. In the same period Swissquote and MIG Bank would have achieved a cumulative volume of CHF 483 billion. The purchase of MIG Bank was financed entirely with equity capital. Although the parties have chosen not to disclose the purchase price, it is estimated to be around 150 million dollars. Swissquote shares went up 16% in 2 days following
the acquisition and as we write this article they now trade up 24% since MIG Bank acquisition.
Following its plans to add copy trade functionalities to the trading platform, OANDA purchased Currensee, an FX copy trading social network, a move which received mixed reactions on the market as Currensee seems to have lost its appeal in the last months.
Two new IPOs also established new retail FX companies as major industry players. Last July Hong Kong FX broker KVB Kunlun went public on the Hong Kong HKEx exchange at the beginning, raising $16 million at a valuation of $117 million and Plus500 went public on the London Stock Exchange’s AIM market,
after raising US$75
million via the placing of US$25 million new and US$50 million existing ordinary shares, for a company valuation of approximately 200 million USD.
FX TRADER MAGAZINE October - December 2013 77
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