StoneX Group reports $82 million “bargain purchase” benefit from Gain Capital acquisition

Global brokerage and financial services firm StoneX Group Inc. (NASDAQ: SNEX), formerly known as INTL FCStone, has announced its financial results for the fiscal year 2020 fourth quarter which ended on 30 September, 2020.

The company reported growth in quarterly operating revenue and income and an $81.8 million bargain purchase on the acquisition of GAIN Capital.

StoneX stated:

During the fourth quarter, we recognized a $81.8 million bargain purchase gain on the acquisition of Gain included in ‘Gain on acquisitions’ in the Consolidated Income Statement. The bargain purchase gain is non-taxable, and accordingly there is no corresponding income tax provision amount recorded related to this gain


StoneX finalized the acquisition of Gain Capital Holdings, Inc in the end of July 2020 for $6.00 per share in all-cash transaction, amounting to approximately $236 million in equity value.

StoneX reported a total operating revenue for the quarter of $342.1 million, up by 30% YoY. The net income for the quarter of jumped 185% to $77.4 million.

The FX contract business registered 725% jump in revenue to $48.7 million compared to last year’s $5.9 million.

Sean M. O’Connor, CEO of StoneX Group Inc., commented:

Despite the unprecedented pandemic and its impact on the economy and markets in general, fiscal 2020 was a year of significant milestones and accomplishments for our company. We achieved record results on a consolidated basis and in nearly every business area, completed several transactions, including the major strategic acquisition of Gain Capital Holdings, Inc. (Gain) and rebranded the company with an eye toward our future.

In addition to record annual earnings from our on-going operations, we realized a significant amount of non-operating income during the quarter, primarily resulting from the gain on acquisition relating to the Gain transaction. We are well placed to take advantage of the continued consolidation of our industry with greater scale and earnings power and more diversity in terms of products and customers.

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