Forex ECN firm FXall (or formally, FX Alliance Inc.) successfully priced its IPO on Wednesday evening, although – as we predicted – at a much lower price and valuation than initially planned.
FXall shareholders sold 5.2 million shares at $12 per share, below the company’s indicated $13.50-$15.50 “filing range” at which they attempted to sell the shares. Nevertheless, the pricing is a major success for the company and (mainly) its shareholders, as the first successful IPO in the Forex sector in more than a year, since FXCM and Gain Capital (Forex.com) debuted in December 2010.
It was an especially good day for FXall’s shareholders. In total they will rake in more than $125 million (less several million dollars in fees to underwriters and lawyers) from the transaction – $62 million from shares sold in the IPO, and $63 million more in a cash dividend paid by the company.
By lowering the IPO value, and the implied market valuation of FXall to $340 million (from $411 million “asking price” in the preliminary IPO prospectus), FXall is now priced much more in line with retail Forex firm FXCM. As per the table below, both are now valued at about 13x earnings (LTM) and 5x EBITDA.
FXall timed things well, with the stock markets performing nicely as it was marketing the offering. Since beginning the roadshow last Monday (January 30), the S&P 500 index was up about 3%, in relatively steady trading.
It will be very interesting to see how FXall stock actually fares in the days following the IPO. It will begin trading on Thursday morning on the New York Stock Exchange under the ticker symbol FX. Stay tuned…..
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