Sydney-headquartered OFX Group Limited has revealed it has agreed to acquire Canada-based Firma Foreign Exchange Corporation. The two firms have agreed on a a total consideration of C$90 million ($69.62 million), nine times the last EBITDA Firma has reported.
Firma was founded in 1998. With global foreign exchange services offering to corporate clients, it provides primary products such as spot and market orders, multi-currency accounts, payments and mass payments and forward contracts.
With 9,600 corporate customers, the Firma has nine offices across Canada, Australia, the United Kingdom and New Zealand.
It is estimated that the acquisition will bring approximately five years of organic growth to OFX Group’s corporate segment. Following completion of the deal, the merger is expected to bring underlying EPS accretion of over 20% in the first year and more than 30% in the second year.
The acquisition have a significant positive impact on the volumes in the trading of USD/CAD and USD/GBP pairs.
OFX Chief Executive Officer and Managing Direator, Skander Malcolm said:
Skander Malcolm Source: LinkedIn
This is our first major acquisition and very much aligned with our strategy of building scale in the Corporate segment and growing the North American region. Firma generates strong earnings from a high- quality customer base and has an excellent service culture, so there is a lot of alignment with OFX. By bringing our businesses together we become a much bigger Corporate specialist with a strong recurring revenue base and considerable growth opportunities.
OFX will use underwritten debt facility and existing cash to fund the acquisition. The company also noted that it expects to repay its debt in less than four years and forecasts strong cash flow for the merged entity.
Malcolm concluded:
Our business is continuing to perform well, with the positive trends we drove in the first half continuing into the third quarter. With the addition of Firma we can accelerate that growth by combining our infrastructure and risk culture with their customer base and service excellence, delivering further profitable growth and value accretion for OFX shareholders.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
