ETX Capital management on Ariel acquisition – LeapRate Exclusive Interview

ETX Capital is on a roll, and apparently isn’t afraid of shaking things up a little in the M&A market. The London-based online Forex broker acquired Ireland-based financial spreadbetting company Shelbourne Markets in June, bringing on board about 10,000 new clients.

In 2012 ETX acquired certain assets of bankrupt WorldSpreads.

But this deal is different. Ariel Communications is a technology and platform company, not a broker. ETX’s acquisition of Ariel communications moves ETX up into the leagues of the ‘big boys’ in retail forex which own their own platform. And it seems that this deal is all about that.

LeapRate had the opportunity to speak exclusively with Joe Rundle, ETX’s Head of Trading, about the Ariel acquisition.

LR: How did this deal come about? Why buy a technology provider?

ETX: This wasn’t about ETX getting into the technology business. ETX has worked closely with Ariel for the past 6-7 years. They became an important technology provider to us, while we became their largest client. ETX provides four trading platforms for our clients – MT4, binary, and two proprietary platforms based on Ariel technology. This deal was done mainly to allow us to control and develop own our technology, which we felt was increasingly important as we grew in size and entered the big leagues of forex brokers. Eventually, it became important for us to control our own destiny with technology.

LR: Will Ariel continue as a third party provider, selling platforms and services to other brokers?

ETX: No decision has been made, we are exploring all opportunities and talking to existing clients and potential new business. The acquisition will allow ETX to add focus and product to its fast growing international strategy.

LR: Did Ariel have significant clients outside of ETX?

ETX: We were by far, in 2014, Ariel’s largest client, accounting for more than half of Ariel’s business. But that wasn’t always the case. Ariel lost a couple of other clients in the past few years, such as London Capital Group (which switched to Star Financial Systems’ Swan) and Cantor Fitzgerald. So the deal made sense from that point of view as well.

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