FXCM Inc acquisition of IBFX assets – $5.4 million

LeapRate Exclusive… LeapRate has learned that the September acquisition by FXCM Inc (NYSE:FXCM) of the US and Australia MT4 clients of IBFX was done for cash consideration of $5.4 million.

The acquisition consisted of approximately $54.4 million in client equity and 13,000 accounts. The deal came together as Japan-based Monex Group, Inc. (TYO:8698), which owns IBFX, decided to exit much of its retail forex business outside Japan, and fold the IBFX brand into TradeStation.

A few other interesting notes regarding the deal, which we’ve unveiled via a series of FXCM filings made with the US Securities and Exchange Commission (SEC):

  1. Client Retention Rate – When first announced, FXCM said it would be acquiring $63 million in IBFX client assets. However in its Q3 10-Q filing made in early November FXCM stated that the number was actually $54.4 million. We understand that about $8.6 million of client assets did indeed leave post-announcement. However, based on other acquisitions we’ve witnessed in the sector over the years, FXCM’s 86%+ ‘retention rate’ is pretty good, given that clients are always free to go elsewhere when acquired.
  2. Valuation – FXCM paid here only about half of what it paid for the FXDD US clients which it acquired back in May. In that deal – as also exclusively revealed by LeapRate – FXCM paid $4.4 million for $23.4 million in client assets – or about 19% of client assets acquired. Here, it paid just below 10% of assets acquired.

For a more complete list of M&A transactions in the Forex sector, as well as comp valuations of Forex M&A deals, see the all-new LeapRate Forex Industry Report for 2015.

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