Mergers and acquisitions within the FX industry continue as GAIN Capital acquires CFD advisory service
Last year was a period during which many FX companies sought to broaden their horizons by acquiring specialist companies which operate in specific niches.
Today, US stalwart GAIN Capital (NYSE:GCAP) has provided evidence that the need for firms to both diversify their service plus add further value via acquiring companies is still very much on the radar, in its announcement that it has bought British CFD advisory firm Galvan Research.
Founded in 2004 by Andrew Gibson, Jonathan Pinkney and James Pinkney, Galvan Research provides individual investors with professional advice and trading recommendations across a wide range of markets, including FX, individual equities, equity indices and other market sectors.
The British CFD market has undergone changes recently, with new entrants like Plus500 taking market share from incumbents such as IG Group, a matter which began to make its presence felt over a year ago.
Additionally, Britain’s home-market companies have increasingly been adding MetaTrader 4 to their armory, demonstrating a need for them to venture overseas to seek non-domestic clients which favor spot FX.
With regard to the transaction, GAIN Capital’s CEO Glenn Stevens has today made a corporate statement that “Galvan Research gives us a solid foundation on which to build a comprehensive advisory service for our clients.”
“This transaction is an important step in enhancing our research and advisory capabilities in support of our recently expanded FX & CFD offering, which now covers 12,500 financial products. We are committed to delivering value-added services to help our clients make informed trading decisions, and high quality trading ideas and advice are a core part of this strategy.”
Andrew Gibson, founder and CEO of Galvan Research, added: “We are delighted to be joining GAIN Capital and look forward to taking advantage of the opportunities associated with being part of a respected company with a global reach. Over the last ten years we have built an award-winning UK business that we are proud of, and we are excited now to be able to extend our service to GAIN’s customer base, as well as have the considerable resources of GAIN behind us as we look to broaden our coverage of financial markets and expand into new geographies.”
Although GAIN Capital has not announced the financial details of the transaction, it has not been unknown for America’s largest retail FX contenders to pay sizable figures for such expertise. Last year, rival FXCM paid $15.6 million to acquire Faros Trading, and with GAIN Capital’s notable ability to fund such acquisitions in the quest for economies of scale, GAIN Capital’s next annual report may prove interesting reading.